Annuities  

Annuities* can be an excellent option for helping to enhance your retirement security.

The Investment Center at Citizens Bank offers three types:

Fixed Rate Annuities can help you reduce your current income taxes, and offer a guaranteed rate of return. Issued and guaranteed by the claims-paying ability of insurance companies, they offer competitive interest rates, with all interest accumulating tax-deferred for the life of the annuity. This means that your earnings stay in your annuity without being taxed, earning you more money over time provided no withdrawals are taken.

Variable Rate Annuities Are you interested in reducing your taxes, while benefiting from the growth potential of the stock market? If so, then you may wish to consider a Variable Annuity.

Variable rate annuities are retirement savings vehicles that combine the benefit of investing in the stock market with the protection options of life insurance.  A variable rate annuity is a contract between an investor and a life insurance company.  With a variable annuity, an investment component exists in a managed pool of assets, called “sub-accounts”, that comes with the insurance contract intended to offer various protection features, such as a death benefit, and other available options for an extra charge or fee, often called ‘riders’.  As with a fixed annuity, earnings grow tax-deferred, meaning taxes won’t be due until you begin receiving payments.  In exchange for your investment, the insurance company agrees to pay a stream of income over time, depending on the contract chosen.  That stream can start immediately upon payment of a lump sum (with what’s called an immediate annuity) or start at some set point in the future (a deferred annuity), and the size of those payments is dependent on the performance of the underlying investment over time. 

With a variable rate annuity, you have the opportunity to invest in a range of ‘sub-accounts’.  They are professionally managed investments that include a range of securities.  You can select the sub-account that best reflect your investment needs: growth, income, etc.

A variable rate annuity also allows for transfer privileges, enabling you to move your money from one sub-account to another as your goals change from growth to income.

Variable annuities allow you to accumulate assets on a tax-deferred basis, so your earnings benefit from being reinvested and compounding for the life of the account.  All earnings are taxed at withdrawal, rather then when earned.

Many of today’s variable annuities also provide additional protection features for an additional charge, including:

• Guarantee of your original investment amount to protect your original investment from loss in the event of stock market declines.
• Ability to lock-in any market gains at a pre-determined time (typically five years from opening the contract).

Variable and fixed annuities are long-term, tax-deferred investment vehicles designed for retirement purposes; but the variable annuity contains both an investment and insurance component. Variable annuities are sold only by prospectus.  Guarantees are based on claims paying ability of the issuer.  Withdrawals made prior to age 59½ are subject to 10% IRS penalty tax and surrender chargers may apply.  Gains from tax-deferred investments are taxable as ordinary income upon withdrawal.  The investment returns and principal value of the available sub-account portfolios will fluctuate so that the value of an investor’s unit, when redeemed, may be worth more or less than their original value.

Investors should consider investment objectives, risks, charges and expenses of the investment company, variable annuity contacts and sub-accounts carefully before investing.  The prospectus contains this and other information about the investment company, variable annuity contact and sub-accounts.  You can obtain fund, contract and underlying sub-account prospectuses from your financial representative.  Read the prospectuses carefully before investing. 

Immediate Annuities can translate your retirement savings into retirement income. These contracts between an individual and an insurance company allow you to exchange a lump sum for a guaranteed income stream over 5 years, 10 years, or an "income for life" agreement.

To learn more about annuities, visit any F&M Bank branch to speak with a Financial Consultant with the Investment Center at F&M Bank.

Disclosures

This information is not intended to provide tax advice. Due to the complexity of tax laws, you are strongly encouraged to seek tax advice from a tax professional.

The LPL Financial Registered Representatives associated with this site may only discuss and/or transact securities business with residents of the following states: MI, OH, WI, IA.

Securities are offered through LPL Financial Corporation (LPL Financial).  Member FINRA/SIPC. Insurance is offered through LPL Financial or its affiliate LPL Insurance Associates, Inc.  Insurance may also be offered through UVEST Financial Services Group, Inc. (UVEST). Investment Center at F&M Bank and F&M Bank are not broker/dealers, nor are they affiliated with LPL Financial or UVEST.

NOT FDIC INSURED - ­NO BANK GUARANTEE - MAY LOSE VALUE - NOT A DEPOSIT - NOT INSURED BY ANY FEDERAL GOVERNMENT ENTITY

This site is designed for U.S. residents only. The services offered within this site are available exclusively through our U.S. investment representatives. LPL Financial's U.S. financial consultants may only conduct business with residents of the states for which they are properly registered. Please note that not all of the investments and services mentioned are available in every state.

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