Contribution and tax characteristics
of retirement assets

1. The ability to contribute or deduct contributions may be limited by adjusted gross income limits.

2. The principal value of bonds will fluctuate with market conditions. Bonds redeemed prior to maturity may be worth more or less than their original cost. Bond interest paid by a municipality outside the state in which you reside could be subject to state and local income taxes. If you sell a municipal bond at a profit, you could incur capital gains taxes. In some cases, municipal bond interest could be subject to the federal alternative minimum tax. Other than contribution limits or tax treatment, several other factors should be considered before purchasing any of these products. These include investment objectives, costs and expenses, liquidity, safety, fluctuation of principal or return, credit rates, rider availability, surrender periods and other product/investment characteristics.

3. An annuity is a long-term, tax-deferred investment vehicle designed for retirement. Earnings are taxable as ordinary income when distributed, and if withdrawn before age 59½, may be subject to a 10 percent federal tax penalty. If the annuity will fund an IRA or other tax-qualified plan, the tax-deferral feature offers no additional value. Not FDIC/ NCUA insured. Not bank guaranteed. Not insured by any federal government agency. There are charges and expenses associated with annuities, such as deferred sales charges for early withdrawals.

4. Upon annuitization, a portion of the principal is included in the annuity payout and is not subject to income taxes.

5. Life insurance products contain fees, such as mortality and expense charges (which may increase over time), and may contain restrictions, such as surrender periods. Please keep in mind that the primary reason to purchase a life insurance product is the death benefit.

6. Withdrawals and loans from a life insurance contract are subject to special tax rules if the policy is a Modified Endowment Contract (MEC). Life insurance policies where premium payments exceed limits defined in the tax code become MECs. The death benefit in a MEC remains tax-free, but distributions may be subject to taxes or penalties.

   Policy loans and withdrawals may create an adverse tax result in the event of lapse or policy surrender and will reduce both the surrender value and death benefit. Withdrawals may be subject to taxation within the first fifteen years of the contract. You should consult your tax professional when considering taking a policy loan or withdrawal.

   This material may contain a general analysis of federal tax issues. It is not intended for, nor can it be used by any taxpayer for the purpose of avoiding federal tax penalties. This information is provided to support the promotion or marketing of ideas that may benefit a taxpayer. Taxpayers should seek the advice of their own tax and legal professionals regarding any tax and legal issues applicable to their specific circumstances.

   This is a general communication for informational and educational purposes. The materials and the information are not designed, or intended, to be applicable to any person’s individual circumstances. It should not be considered financial advice, nor does it constitute a recommendation that anyone engage in (or refrain from) a particular course of action. If you are seeking financial advice or recommendations, please contact your financial professional.

   Other than contribution limits or tax treatment, several other factors should be considered before purchasing any of these products. These include investment objectives, costs and expenses, liquidity, safety, fluctuation of principal or return, credit rates, rider availability, surrender periods and other product/investment characteristics.

   Source: Securian Financial Group, Inc.