How can I plan for retirement if my employer doesn't offer retirement benefits?
Answer:
In many cases, your first step should be to open an IRA and contribute as much as allowable each year. Because of the potential for tax-deferred, compounded earnings, IRAs offer similar long-term growth opportunities as employer-sponsored plans. In addition, you may qualify for tax-deductible contributions or tax-free withdrawals, depending on whether you invest in a regular IRA or a Roth IRA.
Another tax-advantaged option to consider is annuities. Generally purchased from a life insurance company, a typical annuity features the potential for tax-deferred growth and provides either fixed or variable payments beginning at some future time (usually retirement). Depending on the type of annuity, you may have several options in how you ultimately take distributions.
Finally, don't forget about traditional investments (e.g., stocks, bonds, mutual funds). Most of these vehicles are taxable, but they can still help you over the long term. The specific types of investments you select will depend on your risk tolerance, time horizons, liquidity needs, and goals for retirement. A financial professional can help you construct a portfolio that makes sense for you.
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GE 37914 (03/07)
Annuities are long-term financial products designed for retirement purposes. In essence, annuities are contractual agreements in which payment(s) is made to an insurance company, which agrees to pay out an income or a lump sum amount at a later date. There are contract limitations and fees and charges associated with annuities, which include, but are not limited to, mortality and expense risk charges, sales and surrender charges, administrative fees, and charges for optional benefits. Amounts in a variable annuity's investment portfolios are subject to fluctuation in value and market risk, including loss of principal. Your financial professional can provide cost information and complete details.
Withdrawals from annuities and IRAs are subject to normal income tax treatment and if taken prior to age 59-1/2 may be subject to an additional 10% federal income tax penalty. Withdrawals from annuities may also be subject to a contractual withdrawal charge.
Please consider the charges, risks, expenses and investment objectives carefully before purchasing a variable annuity. For a prospectus containing this and other information, please contact your financial professional. Read it carefully before you invest or send money.
Please be advised that this material is not intended as legal or tax advice. Accordingly, any tax information provided in this material is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. The tax information was written to support the promotion or marketing of the transaction(s) or matter(s) addressed and you should seek advice based on your particular circumstances from an independent advisor. AXA Equitable and its affiliates do not provide legal or tax advice.
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