Annuities

Annuities offer benefits that can help meet your retirement goals. If you want to save more for retirement or need guaranteed1 retirement income, you may want to consider an annuity. State Employees’ Credit Union (SECU) offers simplified deferred and immediate annuities to members through its wholly-owned subsidiary, SECU Life Insurance Company (SECU Life).

What is an Annuity?

An annuity is designed to meet long-term goals such as retirement-savings or retirement income. Annuities are often categorized by their primary function: for growth and accumulation (a Deferred Annuity) or income (an Immediate Annuity).

Although there are several types of annuities (fixed, indexed or variable), SECU Life only offers fixed annuities. Fixed annuities provide you with predetermined interest rates2 and payouts that do not vary with market fluctuations.

Types of Annuities to Consider

A Deferred Fixed Annuity is often used to supplement your tax-deferred retirement savings. When you put money in a deferred annuity at SECU Life, your money will grow at a specified rate2 and taxes on the earnings3 are deferred until you choose to withdraw some or all of your balance. This could benefit you if you’ve maximized your contributions to other retirement accounts, such as 401(k) plans or IRAs and want another source of tax-deferred growth.



SECU Life Deferred Fixed Annuity3

How much money do I need to open one?

$5,000

Can I use money from a retirement account like an IRA or 401(k) plan?

No. You can only open this annuity with non-qualified (after-tax) money from sources such as a checking, savings or money market account.

Can I make additional payments after it is opened?

No.

Are there any age limitations?

Yes. You must be age 80 or younger to open this annuity. You should also be aware that withdrawals made before age 59 ½ may be subject to a 10% federal tax penalty.

What is the current interest rate?

3.00%2

How long is the current interest rate guaranteed?1

5 Years

Can I withdraw money without paying a fee?

Yes. You can withdraw up to 10% each year without paying a fee.3

What happens if I withdraw more than 10% a year?

If you withdraw more than 10% of the current balance during any of the 5 years your interest rate is guaranteed, a surrender charge will apply. The surrender charge applies to the amount that exceeds 10% and is assessed as a percentage, depending on the year the withdrawal is made.

Year 1:  5%

Year 2:  4%

Year 3:  3%

Year 4:  2%

Year 5:  1%

An Immediate Fixed Annuity is typically used to convert a portion of your retirement savings into guaranteed retirement income that you cannot outlive.1 That income can be used to cover your fixed expenses in retirement and may help you offset the risk of outliving your savings.



SECU Life Immediate Fixed Annuity5

How much money should I use to purchase one?

The amount of money you use to purchase this annuity depends on your retirement income needs. First, think about your fixed retirement expenses (food, housing, healthcare). Then, determine your retirement income (Social Security, Pension). If your fixed expenses exceed your income, you may want to consider using a portion of your savings to purchase an annuity to cover those expenses.

How are the income payments determined?

The income payments you receive are based on your age, gender, the amount you pay SECU Life, and the income payment option you select. Here are some sample income payments for different age, genders and income payment options.4

Your Age and Gender
Monthly Income Payment You Receive4
Amount You Pay SECU Life: $100,000
Male Age 60*
$503
Amount You Pay SECU Life: $100,000
Male Age 65*
$564
Amount You Pay SECU Life: $100,000
Male Age 70*
$651
Amount You Pay SECU Life: $100,000
Female Age 60*
$479
Amount You Pay SECU Life: $100,000
Female Age 65*
$534
Amount You Pay SECU Life: $100,000
Female Age 70*
$611
Amount You Pay SECU Life: $100,000
Joint Male and Female Age 60**
$430
Amount You Pay SECU Life: $100,000
Joint Male and Female Age 65**
$472
Amount You Pay SECU Life: $100,000
Joint Male and Female Age 70**
$529
Amount You Pay SECU Life: $250,000
Male Age 60*
$1,256
Amount You Pay SECU Life: $250,000
Male Age 65*
$1,410
Amount You Pay SECU Life: $250,000
Male Age 70*
$1,629
Amount You Pay SECU Life: $250,000
Female Age 60*
$1,198
Amount You Pay SECU Life: $250,000
Female Age 65*
$1,335
Amount You Pay SECU Life: $250,000
Female Age 70*
$1,526
Amount You Pay SECU Life: $250,000
Joint Male and Female Age 60**
$1,076
Amount You Pay SECU Life: $250,000
Joint Male and Female Age 65**
$1,179
Amount You Pay SECU Life: $250,000
Joint Male and Female Age 70**
$1,323
*Single Life Only
**Joint Life Only (100% Survivor)

What income payment options are available?

You can choose to receive income payments for your lifetime (and if chosen, the lifetime of a spouse) or for a fixed period.

Are there any age limitations?

Yes. You must be age 90 or younger to purchase this annuity.

What happens if I pass away earlier than I expected?

If you choose an income payment option with a fixed period and you pass away before the end of the period selected, your beneficiaries will receive income payments until the end of the period.

SECU founded SECU Life in 2013 to provide simple, straightforward life insurance and annuity products to members. Although SECU previously offered annuities through other carriers, we wanted to enhance your experience. With SECU Life, you can obtain an annuity that’s simple and easy to understand, without complicated riders and benefits. All of our insurance representatives are salaried employees who are not compensated by commissions or incentives, so you can rest assured their advice is in your best interest.

SECU Life builds on the SECU's long-established history of “People Helping People” and member-focused service. We know many of our members would benefit from annuities and we want to meet those needs the SECU way!

Visit your local branch or contact 24/7 Member Services at (888) 732-8562 to determine if an annuity may be right for you. We look forward to helping you secure your financial future!

Annuities are provided by SECU Life Insurance Company, Raleigh NC. SECU Life Insurance Company is a wholly-owned subsidiary of State Employees’ Credit Union. Annuities are not guaranteed by, or an obligation of any credit union and are not insured by NCUA. Insurance Representatives are licensed to sell in North Carolina only.

Annuities are long-term financial products that are designed for retirement purposes.

1All guarantees are subject to the claims paying ability and financial strength of SECU Life Insurance Company.
2Interest rates are subject to change daily. The initial interest rate will be guaranteed for the guarantee period. Afterwards, interest rates are subject to change annually, but not below the minimum guaranteed interest rate on the contract.
3Withdrawals are subject to ordinary income tax. Surrender charges may apply to withdrawals. Withdrawals made prior to age 59½ may also be subject to a 10% federal tax penalty.
4The monthly income payments provided are for illustrative purposes only and do not constitute a recommendation. There are other factors you need to consider when choosing to purchase an annuity. The monthly income payment you receive will be dependent on several variables that are subject to change until a contract has been issued. This information is not intended to offer any tax, legal, or financial advice.
5Form SPDA-0515
6Form SPIA-0515