AnnuitiesIf you want to save more for retirement or need guaranteed1 retirement income, annuities offer benefits that can help meet your goals. State Employees’ Credit Union (SECU) offers simplified deferred and immediate annuities to members through its wholly-owned subsidiary, SECU Life Insurance Company (SECU Life).
Is an Annuity Right for You?Contact a licensed representative at (833) 599-7328 to determine if an annuity may be right for you.
What is an Annuity?An annuity is designed to meet long-term financial goals such as retirement savings or providing retirement income. Annuities are often categorized by their primary function: growth and accumulation (a Deferred Annuity) or income (an Immediate Annuity).
SECU Life only offers fixed annuities. Fixed annuities have 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 rate,2 and taxes on the earnings are deferred until you withdraw3 some or all of your balance. This tax-deferred feature 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 Annuity4
How much money do I need to open one?
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?
Are there any age limitations?
Yes. You must be age 80 or younger to open this annuity.
What is the current initial interest rate?
How long is the current initial interest rate guaranteed?1
Can I withdraw money without paying a fee?
Yes. You can withdraw up to 10% of the current balance each year without paying a fee.3 However, withdrawals made before age 59½ may be subject to a 10% federal tax penalty.
What happens if I withdraw more than 10% a year?
If you withdraw more than 10% of the current balance during the 5-year period in which your interest rate is guaranteed, a surrender charge will apply. The surrender charge applies to any amount that exceeds 10% of the current balance and is assessed as a percentage that depends on the year the withdrawal is made. This amount is in addition to any federal tax penalty assessed for withdrawals made before age 59½.
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. This income can be used to cover your fixed expenses in retirement and may offset your 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. Determine your fixed retirement expenses (food, housing, healthcare), and then your guaranteed retirement income (Social Security, Pension). If your fixed expenses exceed your guaranteed retirement income, you may want to consider using a portion of your savings to purchase an annuity to cover those expenses.
Are there any age limitations?
Yes. You must be age 90 or younger to purchase this annuity.
What income payment options are available?
You can choose to receive income payments either for your lifetime (and if elected, the lifetime of a spouse) or for a fixed period.
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.
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 examples for different ages, genders and income payment options.5
**Joint Life Only (100% Survivor)
Why SECU Life?SECU founded SECU Life in 2013 to provide simple, straightforward life insurance and annuity products to members. With SECU Life, you can obtain an annuity that’s simple and easy to understand, without complicated riders and benefits. 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!
Insurance Representatives are licensed to sell in North Carolina only.
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.
6The 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.