The Products Portfolio by North Coast Life has the right annuity for you. If you want to begin receiving income immediately, consider an immediate annuity, which converts an initial lump-sum deposit into a series of monthly, quarterly, or yearly payouts right away. If you are years away from retirement, consider a deferred annuity, which delays the payout you receive while the money you save grows without being taxed until withdrawn.

Americans are living longer than ever. For many of us, retirement will last 20 to 30 years, or more. Unfortunately, surveys show that many Americans are not paying enough attention to retirement planning and may not be fully prepared for the financial impact of long retirements.

Tomorrow's retirees are likely to have a very different retirement than previous generations. Fewer workers these days are covered by traditional defined benefit pension plans, which typically are funded entirely by their employers and provide a benefit that guarantees a steady stream of retirement income for life. Furthermore, Social Security is not likely to provide the level of income earlier generations enjoyed. Consumers need other ways to make up for these shrinking sources of income. Annuities can help fill this gap.

Annuities are long-term savings plans. They are the only financial planning tool that can help you save and then provide you with a variety of payout options, including a secure and steady stream of income you cannot outlive. Consumers who have purchased an annuity say it is an important source of their retirement security, preventing them from becoming a financial burden on their families.

A tax-deferred annuity is a savings vehicle that allows your contributions to grow more quickly and provides unique advantages, including:

• Guarantees of principal.
• Competitive current interest rates.
• Minimum interest guarantees over the life of the contract.
• Tax-deferred growth.
• Access to accumulations.
• The ability to bypass probate.

Savings accounts, money market funds, CDs and other taxable investments lose a significant amount of each year's interest earnings to income taxes. However, with an annuity, the income tax on interest credited is deferred as long as it remains a part of the accumulation value. In other words -- your principal earns interest; your interest earns interest; and the money that you would have paid in taxes earns interest! As a result, the growth of your annuity is significantly increased.

Picture it as a flexible retirement planning tool. It allows your retirement savings to grow on an income tax-deferred basis and then allows you to choose a payout option that best meets your need for income when you retire - a lump sum, income for life, or income for a certain period of time. They are often described as the opposite of life insurance - it pays while you live, and life insurance pays after you die.

There are many different reasons to purchase them. One of the biggest advantages according to annuity owners is that it allows savings to grow without any current tax, since earnings on them are not taxed until payouts begin. Many others say they like them because it provides a steady stream of income they cannot outlive, a particularly useful feature for those who do not have a defined benefit pension plan.

In a recent Gallup survey, people who had purchased an annuity said they believed annuities:

• Have a good rate of return.
• Provide a long-term savings plan.
• Are an important source of retirement security.
• Are an easy way to save for retirement.
• Can ensure a surviving spouse has a continuing income.
• Provide flexibility in how payouts are received.

For deferred annuities, credited earnings build up free of current income taxes. Contributions for tax-qualified plans, such as IRAs, TSAs, 401(k)s, 403(b)s, are generally made on a tax deferred basis. These earnings and contributions are taxed when withdrawn from the annuity.

You have the option to take lump sum payouts from your deferred annuity. In this case, the earnings (interest) in your account are required to be withdrawn first and are subject to income tax, before any amount is treated as a return of your contributions. Income tax would also be paid on any tax-deferred contributions withdrawn. In addition, the earnings are subject to a penalty tax of 10 percent if you withdraw the money before age 59 ½, except in certain circumstances, such as disability or death. Other tax penalties can occur if you fail to take the annual minimum required distribution for a tax-qualified plan.

Under a deferred annuity, you can elect an option (an immediate annuity), that provides a periodic stream of income payments that will prevent the payment of the tax penalties mentioned above. Under such an option, tax deferral is continued on funds not yet withdrawn. Under an immediate annuity, part of each payout will be treated as a return of earnings and taxed as ordinary income. The balance of the payment is considered a return of contributions and will only be taxed if the contributions were made on a tax deferred basis. You may purchase an immediate annuity with funds transferred in a tax free exchange from another tax-qualified plan. Periodic Income payments for life meet the minimum distribution requirements of tax-qualified plans.

You are advised to consult a tax adviser for more information about the taxation of any contemplated annuity distributions to ensure that you avoid any unnecessary penalties and minimize any income taxes. The Internal Revenue Service also has publications on the subject that may be helpful.