Fixed Annuity Plan
Your Due Annuity Account comes with a 3% guaranteed interest rate on your money. No hidden fees. Just a simple retirement plan for people like me and you.
Take control of your retirement
See exactly how much money you will get on a monthly basis once you retire. With our simple Annuity Calculator you can see how much money you will have coming into your bank account. Got a bonus you want to put to retirement, easy.
No catch. Your get 3% a month on your money. Deposit money each month and know exactly how much money you’ll have when you retire. Got unexpected expenses? You can cash out your annuity money you’ve invested at any time.
Annuity Plan Rates
Simple calculation, you get 3% on everything you deposit into your Due annuity plan.
When you retire at 65+ you get a fixed monthly fee for the rest of your life. This isn’t a variable rate, this is a fixed annuity that you will get till you die.
Why choose Due for your custom Annuity program?
WSJ Reported that the #1 worry for people when they retire is running out of money. No more worries. There are no tricks up our sleeves. We don’t have some complex algorithm. We keep it simple. We don’t have you take on the risk. We guarantee a fixed monthly percentage and stick to it. Start a Due private annuity online in minutes. We’re on a mission to help everyone enjoy a worry-free retirement, by creating a annuity that’s fit for the 21st century.
You Are Always in Control
You can invest as much as you would like each month, no limits. The more you invest, the more you’ll get each month when you retire.
Want to cash-out your annuity? You can cash out at any time. Yes, there are a few fees to bring out your money early. Typically this ranges from 8% – 10% as your money is invested in . The longer you have your money invested, the lower that fee becomes.
takes less than 2 minutes
THE ULTIMATE GUIDE TO AN
Today we’re going to teach you about an Annuity. Regardless of your financial goals and status, everyone needs to have a plan for retirement. Unfortunately, 64% of Americans have reported that they are not prepared for retirement. More troubling is the fact that 48% don’t even care.
While there are a variety of reasons, like not having enough money to save, the fact is you need to think about your retirement yesterday. Even if you begin stashing money away in a savings account each month is better than nothing. At some point though, you are going to have to step-up your retirement plan by investing in retirement savings vehicles like a 401(k) or an IRA.
But, have you also considered additional retirement plans like annuities? If not, you may want to. Although frequently misunderstood, it can be an effective way to generate a stream of lifetime income — guaranteed.
If that sounds too good to be true, then dive into the following annuities guide. It will explain everything that you need to know about annuities so that you can determine if they fit into your retirement plan.
What You’ll Find in This Guide
In this guide, we’ll look at the pros and cons of annuities. We’ll discuss the options and the values, and we’ll explain what you need to know as you consider using this financial tool to give yourself a more secure financial future.
While all annuities swap a customer’s payments for a future return, annuities come in a range of different versions. In addition to being either deferred or automatic, they can also be variable or fixed, and they can be limited and set for life. Their values vary over time and the rates that they deliver to customers can also vary between insurance companies.
As you consider adding an annuity to your financial toolbox, we’ll make sure that you have the information you need to decide whether this tool suits you and which kind of annuity suits you best.
An Overview of Annuities
Before getting too far ahead of ourselves, let’s quickly explain what an annuity is.
Believe it or it’s actually an insurance product. Specifically, it’s a contract between you, the annuitant, and an insurance company where you’ll make a single payment or series of payments, also known as premiums. In return, you’ll receive regular disbursements that begin either immediately or sometime in the future.
That may sound confusing. And, that’s to be expected. After all, annuities can be very complex. So, the easiest way to think of an annuity is when you purchase travel insurance or a warranty on a new vehicle. They offer protection in case your trip gets canceled or your car breaks-down. Annuities guarantee that you’ll receive a steady income for the rest of your life.
Because of this, annuities are often used as a way to save for retirement. When you go this route, you’re essentially paying an insurance entity to grow that money. And, more importantly, send you payments when you retire.
However, some prefer to convert their savings into a stream of retirement income. But, you do have the option to do both. If so, the insurance company will delay the pay-out until the future.
While this might be a lot to wrap your head around, the main takeaway should be this; with annuities, you pay an insurance provider. As a result, they’ll assume the risk of you outliving your retirement savings if you happen to outlive your income. What’s more, you’re also safe from market risks.
Annuities are a way to turn a sum of money into revenue, often to supplement a retirement income. They’re long-term investments aimed at people looking for financial security.
You can buy an annuity from an insurance company, paying in advance over a long period or with a single lump sum. The payouts can start immediately or you can defer them until your payments have accumulated. The result should be a predictable income for life or for a set period.
Key Features of an Annuity
What Is an Annuity?
An annuity is a contract with an insurance company. Insurance products are designed to manage risk. Flood insurance, for example, lowers the risks that a homeowner will face large expenses if a pipe bursts or a roof leaks. An annuity manages the risk that you’ll outlive your savings or that a financial collapse might reduce their value. The insurance company accepts the risk that it might make payouts greater than the value of its clients’ savings.
How Annuities Work
Annuities can work in a number of ways. Usually, the client makes monthly payments over a period ranging from ten to 30 years. The insurance company invests those payments which grow cumulatively. At the payout phase, the insurance company begins making regular distributions to the client for a set period, often for the rest of their life. Clients can make payments using pre-tax dollars and only pay income tax when they receive their distributions.
It’s also possible to begin distributions almost immediately. Instead of paying monthly premiums over decades, you can buy long-term distributions by investing a lump sum, turning savings into a revenue stream.
Insurance companies cover the risk by charging fees. They can add riders to customize conditions, and they impose penalties for withdrawing funds early.
Key Annuity Terms
Immediate Payouts Versus Deferred Payouts
Annuity payouts can be immediate or deferred. Your choice will depend on your stage of life, the status of your savings, and the reason you’re considering an annuity.
Immediate annuities deliver a revenue stream within a year of the purchase of a policy.
- Pay with a lump sum
- Start receiving monthly payouts
- Supplement retirement savings
An immediate annuity begins making payouts without an accumulation phase. Instead of paying a premium every month for several decades, you give the insurance company a lump sum and begin receiving a regular income right away. Immediate annuities make up about 10 percent of annuities sold.
Like other annuities, immediate annuities can offer various payment schedules, payout periods, and inheritance riders. They can also be fixed or variable.
The biggest benefit of an immediate annuity is that it allows new retirees with significant savings but small retirement funds to supplement their retirement income.
Deferred Annuities deliver a revenue stream years—often decades—after the initial purchase of the policy.
- Paid in installments over a long period
- Receive payouts on retirement
- Enjoy tax-deferred growth
A deferred annuity makes payouts after an accumulation phase. During the accumulation phase, the premiums grow on a tax-deferred basis, lowering tax liabilities when your income is at its highest, and providing an opportunity to pay income tax at a lower level.
An immediate annuity provides one way to save for retirement, supplementing other retirement funds such as a 401(k) or an IRA.
A Variety of Annuities
Insurance companies make annuity products in different forms to suit different buyers and meet different preferences. The most common forms include:
Fixed annuities promise a guaranteed interest rate. Instead of the growth rate of premiums rising and falling in line with the performance of the market, a fixed annuity offers a standard rate, often around 3%. They make planning for the future easy and predictable.
- Always know how quickly your savings will grow, and how much you’ll receive
- Protect your premiums—a fixed annuity guarantees the interest rate and secures your premiums
- Lower fees than variable rate annuities
Fixed annuities offer reliability and security. They let people save for the future, and know exactly how much they’ll receive on retirement.
Variable annuities link the growth rate of an annuity to an investment vehicle. That vehicle might consist of a mixture of bonds, stocks, and fixed interest accounts but the value of the fund will rise and fall in line with the market. Variable annuities are unpredictable but they can produce higher growth than fixed annuities.
- Benefit from economic growth and market booms
- Beat inflation with higher interest rates
- Higher fees than variable rate annuities
Variable annuities carry some element of risk. The amount you receive at retirement will depend on the performance of the market during the accumulation and payout phase. You won’t know exactly how much you’ll receive each month before you retire.
Why You Should Consider Buying an Annuity
Annuities deliver a range of benefits. Consider an annuity if you’re looking for one or a combination of the following returns:
- Tax-deferred growth
- A regular income instead of savings in the bank
- Guaranteed principal protection
- Good growth rates
- An asset that beneficiaries can inherit
Immediate annuities are popular with people on the edge of retirement who want to swap their savings for a guaranteed income. Deferred annuities allow people to put aside income on a tax-deferred basis and add another revenue stream to their retirement fund.
What a $100,000 Immediate Annuity Buys You
Imagine that you’re 67 years old. You’re about to retire. You have some savings but you’re worried that your 401(k) and your IRA won’t give you enough to retire comfortably. How much would your income rise if you swapped $100,000 of your savings for an immediate annuity?
The payout will vary from insurance company to insurance company. It will also depend on the riders you attach to the annuity. Guaranteeing a payout for a period of time, such as 10 or 20 years, will affect the payout. So will including a death benefit or covering the lives of a couple rather than a single individual. The sex of the primary annuitant matters too.
According to one annuity calculator, a $100,000 fixed income immediate annuity would deliver between $433 and $474 a month for a single life.
Here is the official annuity formula:
The Advantages of Annuities
Annuities give savers a number of important benefits. Unlike 401(k) plans and IRAs, they have no contribution limits. Annual contributions to a 401(k) max out at $19,500 with up to $6,500 of catch-up contributions for people aged over 50. IRA contributions are limited to just $6,000 a year, or $7,000 for the over-50s. Annuities can take any contributions at all.
They can also produce a reliable revenue stream, reduce tax bills, and give people who haven’t funded their retirement accounts sufficiently a way to retire.
Invest As Much As You Want
Buy an annuity that suits your needs. Put aside as much as you want each month or convert as much of your savings as you want into a monthly income. Annuities have no limits.
Reduce Your Tax Payments
Annuity contributions are tax-deferred. Make your contributions with pre-tax dollars and you’ll only pay income tax on that amount during the payout phase. Make your contributions with after-tax dollars and you’ll only pay tax on the earnings.
Turn a Lump Sum into a Revenue Stream
Annuities let you turn a lump sum into a guaranteed revenue stream. An insurance company manages your savings and gives you a monthly income.
Pass on Your Assets
Riders in your annuity can guarantee an income for the rest of your life and ensure that beneficiaries also inherit some of the fund.
The Disadvantages of Annuities
Annuities can be useful tools but they’re not for everyone. They do carry a number of disadvantages that need to be considered as you weigh up whether or not to buy an annuity.
Money placed in annuity is locked up. You won’t be able invest it in other vehicles that could earn more, or benefit from a rise in interest rates.
Annuities deliver security, not a promise of high returns. Payouts are often conservative in comparison to other investment plans.
Insurance companies make their money out of fees and commissions. Those expenses vary with the nature of the annuity but a savvy investor might be able to get a similar return themselves without the fees.
The range of riders and options offered by insurance firms can make decision-making difficult. You might find yourself wondering how long you have to live and how much you should leave your heirs.
What to Consider in an Annuity
As you weigh up buying an annuity, there are a number of issues you should consider.
The Investment Amount
If you’re buying an immediate annuity, aim to balance a high monthly income with access to liquid funds. The more you invest, the higher your income will be but you will also need some savings for one-off expenses.
Riders affect the size of the payout. The more security you add to your payouts and the more benefits you want to leave to your beneficiaries, the lower your payouts will be.
Stability Versus Risk
One of the biggest benefits of an annuity is that it delivers a reliable income. If you can tolerate some risk, though, a variable rate annuity might deliver a higher return.
Fees and Returns
Annuities have expenses. Different plans will charge different rates and offer different returns. It’s worth shopping around to make sure that you’re getting the best return for your money.
To Invest in an Annuity, Start Here
To start investing in an annuity, contact us today. We’ll walk you through the options and help you to find an annuity that’s right for you.
The payout value of an annuity is based on the life expectancy of the annuitant.
The annuity’s growth rate. The rate may be fixed (such as 3% annually) or variable, changing with the performance of the financial markets.
Cash Surrender Value
The amount that the annuity holder can withdraw from the contract early after the deduction of surrender charges.
Fixed Period Annuity
A payout phase limited by a number of years instead of the owner’s lifetime.
The number of days during which an annuity owner can cancel the contract. You might have as little as 10 days to cancel the purchase of an annuity.
Income Floor Guarantee
A guarantee that a minimum percentage of the investment will be paid out. A contract might promise to pay back 80% of the value of a variable rate annuity, for example.
An annuity purchased with after-tax dollars. Tax on the fund’s earnings only become payable during the payout phase.
A split annuity is a combination of a deferred annuity and an immediate annuity. When the immediate annuity is exhausted, payouts begin from the deferred annuity.
Chapters - Annuity
- What Is an Annuity?
- The Difference Immediate Annuities and Deferred Annuities
- How does an annuity work?
- The Benefits of a Deferred Annuity
- The Benefits of an Immediate Payment Annuity
- What Is a Variable Annuity?
- What Is a Fixed Index Annuity?
- What Is an Indexed Annuity?
- A Brief History of Annuities
- Will Annuities Recover?
- Money for Today or the Rest of Your Life?
- Are There Any Other Types of Annuities?
- Become Familiar With Annuity Fees
- What Are Your Payout Options?
- Weighing the Pros and Cons of Annuities
- Is An Annuity Right For You?
- How To Measure Your Annuity
- Understanding Annuity Formulas
- Annuity Calculators
- 5 Questions To Ask Before Buying An Annuity
- Annuity Glossary Index
It’s pretty simple. Click the signup button, enter in all the information that we require for getting your Due retirement account all setup and then setup how much money you’d like to deposit into your account each month. Total process on average takes around ten minutes to setup.
If you have any problems setting up your Due annuity account please contact our support team and we’ll help to get you setup.
Keep in mind, we will never contact you via phone and ask for personal information. We require each person to have two-factor authentication setup in order to fund their annuity account.
Great question, it’s pretty simple. We setup an account in your name and invest the money that you entrust with our company.
Due charges a monthly fee of $10. This money goes towards the management and growth of our company.
Due give 3% interest on all the money you have in the Due platform. We then invest the money and take on the risk. We guarantee you a rate of 3% on your money. You do not receive any more or any less than this amount.
Due tells you at any time how much money you’ll receive for the rest of your life. When you turn 65 years old (or a predetermined age you choose) you will receive a “deposit” into your bank account on the 1st or 15th (you can choose) of each month.
You can withdraw your money at any time. Typically if you withdraw your money before the age of 65, we require you pay a 10% penalty fee. The reason behind this is that we have your money invested in longer term investments that have large penalties for taking out your money. When we invest the money like this, it allows us to give predictable returns for our customers. Special note: Withdrawals before age 59½ may be subject to a 10% IRS penalty tax in addition to this amount.
All investments involve risks, including the possible loss of capital. While this isn’t the goal, it is a possible outcome. With that said, we invest every dollar of your money into Charles Schwab account where your money is managed by two of the top investment firms in the nation: Blackstone (NYSE: BX), and ATHOS Private Wealth. Both of which have a very good reputation.
Got additional questions, message us via support at anytime!
That really depends on you. We do not limit the amount of money that you can contribute to your annuity account each month.
Here are a few recommendations and guidelines on how much you should be investing. Note, we’re not financial advisers but want to help give you the best info possible.
1. Make sure you’re maxing out your 401k, Roth IRA, HSA Accounts and all other investment accounts that will help long term. Especially matched benefits programs like 401k before putting in money.
2. Start with a healthy amount each month. This might be $20, $200 or $1000 a month. The more you put into your account, the more you’ll get each month.
3. How much money do you need each month when you retire? Check out our annuity calculator to help you back out how much money you need to put in each month to have the appropriate amount of monthly money coming to you each month
We don’t recommend putting in more money than you can afford to invest. Don’t pull money from a credit card to put in your annuity account. Yes, there are people who have and we don’t recommend it. Don’t borrow money. If there are debts that you owe and we receive a legal notice, we will be required by law to withdraw the money from your account. This could include unpaid hospital bills, unpaid taxes, etc. All investments involve risks, including the possible loss of capital. Don’t invest more than you could afford to lose.
It’s pretty simple. Login to your Due annuity account and request a withdraw. You’ll have to verify a few things. This will also include a call from our customer service team to confirm the withdrawal. This can take up to five business days to fully fund.
Special note: if you withdraw before your retirement target date, you could impose up to a 10% early withdrawal fee on your money as it’s invested in long term investments and we have to pull out of those positions.
There are benefits to both a monthly annuity or a lump sum. Lets walk you through a few benefits and drawbacks to each option to help you make the best decision when you decide to retire.
A monthly annuity is a sum of money that gets deposited in your bank account each month. People like this because it’s guaranteed income (though much smaller amount) that helps you not worry about running out of money for the rest of your life. The biggest drawback is that you won’t have a bunch of money to put into a different investment that requires a lot of money.
A fixed lump sum is a great option if you’re wanting to make a large purchase like real estate or something similar, starting a business or if you’re wanting to invest the money yourself into the stock market. You could potentially gain a lot of money but do risk losing a large amount. Taxes can also be a negative factor when pulling out large sums of money from your annuity.
There are many different types of annuities. Each one has their advantages. Our customers genuinely know Due as a fixed annuity program as we payout monthly, but many people can fit their type of annuity into our program.
Deferred Annuity – A deferred annuity is a form of annuity that Due offers. This is for people like me and you what want to build up a nest egg annuity before we retire. We defer our payments until a future date. In most cases when you retire at 65. Deferred annuities are very popular for people looking to have guaranteed income in the future. Some people prefer to defer these payments until they stop working which could be long into their 70’s. It’s really up to you!
Fixed Annuity – Fixed annuities are fixed interest investments issued by insurance companies like Due. These types of annuities pay guaranteed rates of interest. We find these genuinely are higher than bank CDs. In most cases you can defer income to a later date (in our case at your retirement age) or draw income immediately (if you’re wanting to get money right now. We offer both options for fixed annuities. Our customers love the guaranteed fixed investment to help them predict their retirement.
Immediate Annuity – An immediate payment annuity is very similar to a life insurance policy. Instead of waiting years, you can deposit a large sum of money in exchange for regular income each month. This is typically invested for 12+ months before you start receiving the monthly annuity payout. You have to be comfortable sacrificing a large sum of money in your bank account for monthly money deposited into your account.
Variable Annuity – These types of annuities are typically put into subaccounts (mutual funds). How much money the annuity is worth depends on how well the total value of the mutual fund performs over the period of time divided up all the among the accounts. If they perform bad, they will not pay out that well. Variable annuities are popular among retirees that want a little bit more than the average fixed annuity will return.
Fixed Indexed Annuity – A fixed indexed annuity is genuinely a rate that is attached to a specific fund or something like the S&P overall performance. Fixed indexed annuities typically offer a guaranteed minimum income benefit with a small chance of an increase if the fund invested in performs above average. A huge drawback to these types of annuities is that they typically perform a little off the market and don’t gain like you would if you invested in a more risky type of annuity.
Using our annuity calculator you can find out this information. A lot of the data behind this depends on how old you are. Here are a couple quick reference points, keep in mind that they are not exact numbers as we don’t have your age:
- If you’re 30 years old right now and you don’t deposit any more money you’ll receive $10,049 yearly. This comes out to $837 a month for the rest of your life.
If you add $100 a month, you’ll receive $12839 yearly. This comes out to $1070 a month for the rest of your life.
If you add $500 a month, you’ll receive $23,997 yearly. This comes out to $2000 a month for the rest of your life.
- If you’re 40 years old right now and you don’t deposit any more money you’ll receive $7,477 yearly. This comes out to $623 a month for the rest of your life.
If you add $100 a month, you’ll receive $9177 yearly. This comes out to $765 a month for the rest of your life.
If you add $500 a month, you’ll receive $15,974 yearly. This comes out to $1331 a month for the rest of your life.
- If you’re 50 years old right now and you don’t deposit any more money you’ll receive $5,564.16 yearly. This comes out to $463.68 a month for the rest of your life.
If you add $100 a month, you’ll receive $6,572 yearly. This comes out to $548 a month for the rest of your life.
If you add $500 a month, you’ll receive $10,003 yearly. This comes out to $834 a month for the rest of your life.
- If you’re 65 years old right now and you don’t deposit any more money you’ll receive $3,678.60 yearly. This comes out to $306.55a month for the rest of your life.
As you can see, that number grows significantly if you start putting in $500 – $1000 a month when you’re in your 30’s and 40’s.
Great question. We have built our “annuity” type of a program so that it will payout money for the remainder of your life. The more money you deposit into your account, the more money you’ll get each month.
Every annuity account in Due has the ability to cash out at any time.
Once you start receiving monthly payments, the value of the cashout will go down each month. This will continue to go down until it reaches zero. You’ll still receive monthly money until you die despite not having anything to cash out.
Monthly money will continue to be deposited in yours and your partners account until both of you die.
If you and your legal partner die before your “lump sump” money runs out, your “dependents” will be required to withdraw the money. We do require adequate documentation. Please contact support if this is the case.