Annuities and Retirement Income in New Jersey

What to know before you choose

There are a few main types. A fixed annuity credits a declared interest rate for a set period. A fixed indexed annuity credits interest based partly on a market index, with a floor that protects your principal from index losses, subject to caps or participation rates. An immediate income annuity turns a lump sum into payments that start right away, for life or a set period. Deferred income annuities start payments later. Every promise in the contract depends on the claims-paying ability of the insurance company.

Surrender charges are the trade-off. Most deferred annuities charge a fee if you take out more than a set withdrawal amount in the early years, and the charge usually falls a little each year until it reaches zero (Investor.gov). That is why an annuity should hold money you will not need for emergencies.

A surrender schedule in dollars, as an illustration. The SEC uses this example schedule in its annuity guide: 7% in the first year, 6% in the second, 5% in the third, and so on until the eighth year, when no charge applies (SEC). Put $100,000 into a contract with that schedule and cash it all in during year one and the charge is $7,000; in year three it is $5,000; in year seven $1,000; from year eight, nothing. Real contracts set their own schedules and usually allow a withdrawal each year without a charge, so Jackie writes the actual schedule for the contract in front of you in dollars, year by year, before you sign. The $100,000 is an example amount, not a recommendation.

Why a fixed product can still cost you money: surrender charges, optional rider fees, and in some contracts a market value adjustment on early withdrawals. None of that is a market loss, and all of it is avoidable if the money is truly long term. That is the point of checking your emergency savings first.

Some contracts and riders can raise income payments for qualifying health conditions, which can matter for clients facing a serious diagnosis. The terms are set by each contract, so Jackie reads them with you rather than assume.

Taxes matter too. Growth in a deferred annuity is generally tax deferred until withdrawn. Annuities held inside an IRA follow IRA rules, including required minimum distributions that generally begin at 73 (IRS). Jackie is not a tax advisor, so bring your accountant in where it matters.

We pride ourselves in being the expert from start to finish. Consultations are by phone, Zoom, or in person, at no cost to you: call or text Jackie at (856) 727-4221.

New Jersey rules to know

Annuities sold in New Jersey are insurance products regulated by the NJ Department of Banking and Insurance, where you can confirm that a company and an agent are licensed.

You get a short period after delivery to read the contract and return it without a surrender charge; the SEC notes these periods are usually 10 to 30 days (Investor.gov). The exact period is printed on your contract, and Jackie points to it on the day it arrives.

This page covers fixed and fixed indexed annuities, which are insurance products. Variable annuities are securities and are outside this service.

For a no-cost, no-obligation review, call or text Jackie at (856) 727-4221. Medicare.gov and 1-800-MEDICARE list every plan in your area if you want to check a comparison against the full list, and your county Office on Aging can point you to local programs.

How and when to enroll

1. Start with an Income Strategy Session so we know the income gap and the money that should stay available.
2. Jackie reviews your income, assets, goals, time horizon and need for access to money with you, and documents it.
3. You get the contract details in writing, including surrender schedule and charges, before you sign.
4. After issue, read the contract during its return period and call Jackie with any questions.

Common mistakes to avoid

• Putting emergency money into a contract with multi-year surrender charges.
• Comparing headline rates without reading caps, participation rates and fees.
• Replacing an existing annuity and paying a new surrender charge without a clear benefit.
• Treating an annuity as an investment account. It is an insurance contract with promises and limits.
• Letting the return period pass without reading the contract.

What Jackie checks for you

1. Your emergency savings and the money you may need in the next several years, which stays out of any annuity.
2. Your income gap after Social Security and any pension, from an Income Strategy Session first.
3. Your income, assets, goals, time horizon and need for access to money, written down with you.
4. The surrender schedule, the amount you can withdraw without a charge, rider fees and any market value adjustment, written in dollars year by year.
5. If you are replacing an existing contract, the surrender charge you would pay now against what the new one adds.

Questions to ask Jackie

• What would I pay in dollars to take my money out in year one, three or five?
• How much can I withdraw each year without a charge?
• What is the minimum interest rate, and what are the caps or participation rates on indexed crediting?
• Are charges waived for a nursing home stay or a terminal illness?
• How long is my return period, and what commission do you earn?

How Jackie helps

• Fixed, fixed indexed and income annuities explained in plain English
• Surrender charges and fees shown in dollars, not percentages alone
• Your needs and goals documented with you before any recommendation
• Income options compared: lifetime, joint life or a set period
• Coordination with your Social Security and Medicare timeline
• A yearly review of statements and options

Who it fits

You are near or in retirement, want part of your savings to provide steady income you cannot outlive, and have other money set aside for emergencies.