Deferred Annuities 


Deferred annuities are long-term investments that can be used for both savings and retirement income. They are funded by either a single deposit or a series of deposits and have two distinct phases: the deferral phase, during which your money can accumulate on a tax-deferred basis, and the income phase, when your contract values can be converted into a stream of income during retirement.

Deferred annuities may be appropriate if you want to:

  • Set aside money that can be used to provide a stream of income during retirement.
  • Save for retirement gradually and accumulate funds on a tax-deferred basis.

There are two basic types of deferred annuities – fixed and variable.

Deferred Fixed Annuity

A deferred fixed annuity has a rate of return that is set and guaranteed for a specific time by the insurance company. This type of annuity may appeal to you if you have a more conservative approach to retirement or are looking for a vehicle to serve as a conservative portion of your retirement plan.

Features of a deferred fixed annuity:

  • Tax-deferred growth
  • Fixed interest rate, with safety of principal
  • Death benefit for your beneficiaries

Deferred Variable Annuity

A deferred variable annuity is a long-term investment that has a rate of return based on investments you choose. Variable annuities typically offer numerous investment options, can help diversify a retirement plan and can be allocated according to your risk tolerance level. The performance of variable funds is not guaranteed and can fluctuate.

Features of a deferred variable annuity:

  • Tax-deferred growth
  • Professional fund management and asset diversification
  • Tax-free transfers between investment options
  • Death benefit for your beneficiaries

Withdrawals from variable annuities may be subject to ordinary income tax, a 10% IRS early withdrawal penalty if taken before age 59½ and contractual withdrawal charges. Variable annuities have ongoing portfolio fees, mortality and expense fees and may have annual contract fees. Refer to the Prospectus for details.

Because variable annuities are investment products, they are sold by prospectus, which can be provided to you by your financial representative. All investments carry some level of risk including loss of principle.

Variable contracts have limitations. You should carefully consider the investment objectives, risks, expenses and charges of the investment company before you invest. View a prospectus or contact a Northwestern Mutual Investment Services Registered Representative.

Issuer: The Northwestern Mutual Life Insurance Company (Northwestern Mutual/NM) Milwaukee, WI.

Principal Underwriter: Northwestern Mutual Investment Services, LLC, subsidiary of NM.

NMFN-ANN-006 (0713)


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