Clients can choose one of a variety of annuity income options to create the income they need. The income option and frequency of payments (monthly, quarterly, semiannually, or annually) is set at contract issue and cannot be changed. The minimum annuity income payment amount is $250. Income payments must begin within one year of purchase.
Period Certain Option
Single Life Options
Joint Life Options3
Income payments can be reduced to 50%, 67%, or 75% of the current income payment upon the death of either annuitant.
Joint and Survivor Life Options3
Income payments can be reduced to 50%, 67%, or 75% of the current income payment upon the death of the primary annuitant.
A one-time increase or decrease in payments based on an anticipated event.
After reaching age 591/2 the first contract year, if clients elect to receive monthly annuity income payments, they may accelerate income payments and receive a lump-sum amount equal to three or six times the normal monthly payment. Please note, for pretax (qualified) contracts, the entire payment acceleration period must be in the same tax year.
The following chart assumes normal monthly payments are $1,000 and demonstrates how the Income Payment Acceleration feature works.
Withdrawals of Guaranteed Income Payments
For nonqualified contracts, clients may make a lump-sum withdrawal of up to 100% of the present value of remaining guaranteed income payments. Not available in OR.
Please note: If clients elect the Income Payment Acceleration feature, there is a six-month waiting period before they may make a withdrawal. Likewise, if clients make a withdrawal, there is a six-month waiting period before they may elect the Income Payment Acceleration feature.
Premium: Single premium. All cash purchase payments must be submitted with the application. 1035 exchange/transfer requests must be submitted with the application and the funds must be received within 60 days (90 days in NY).
Minimum Purchase Payment: $25,000 (qualified and nonqualified).
Maximum: $1 million; total purchase payments greater than $1 million require Pacific Life home-office approval in advance.
Maximum Annuitant/Owner Issue Age: 90
All guarantees are subject to the claims-paying ability and financial strength of the issuing insurance company.
1For qualified contracts, the maximum length of time for the Period Certain options may not exceed 10 years (9 years for inherited IRA), if necessary, to comply with required minimum distribution (RMD) regulations for annuities stipulated in the Setting Every Community Up for Retirement Enhancement (SECURE) Act.
2Not available on qualified contracts.
3For IRA, Roth IRA, and SEP-IRA contracts, joint annuitants are limited to either a spouse, or individual older than or no more than 10 years younger than the primary annuitant.
4An increasing future adjustment is not available for qualified contracts.
Broker/dealer and state variations may apply. Contact your broker/dealer for availability.
Qualified contracts, including traditional IRAs, SEP-IRAs, Roth IRAs, inherited IRAs, and inherited Roth IRAs, are eligible for favorable tax treatment under the Internal Revenue Code (IRC). Certain payout options and certain product features may not comply with various requirements for qualified contracts, which include required minimum distributions and substantially equal periodic payments under IRC Section 72(t). Therefore, certain product features, including the ability to exercise withdrawal features, may not be available or may have additional restrictions. The payment acceleration feature is available, but will be considered a modification to the 72(t) program and may subject the series of 72(t) withdrawals to an additional 10% federal tax. In addition, certain payout options may not be available for qualified contracts.
For Roth IRAs, upon the Roth IRA owner’s death, distributions to the designated beneficiaries may be subject to IRS required minimum distribution rules. If the designated beneficiary is not the spouse, the beneficiary may be required to take a lump-sum payment of the present value of the guaranteed payments if a death benefit becomes available. For the purpose of qualified distributions from a Roth IRA, since the five-year waiting period is tracked by the Roth IRA holder, the designated beneficiary and/or spouse who elects to treat the Roth IRA as his or her own will also need to take on this responsibility going forward when claiming qualified distributions.
Income from annuity payments received from Pacific Income Provider cannot be aggregated or combined with income from other IRA contracts/assets for purposes of satisfying the required minimum distributions.
Nonqualified contracts may not be subject to the various requirements for qualified contracts, but are still subject to an additional 10% federal tax for annuity payments, withdrawals, and other distributions prior to age 59½. While there are exceptions to this additional federal tax under IRC Section 72(q), certain payment options may not comply. The payment acceleration feature may be considered a modification to the 72(q) program and may subject the series of 72(q) withdrawals, including any prior withdrawals, to an additional 10% federal tax. For nonqualified contracts, an additional 3.8% federal tax may apply on net investment income.
Pacific Life, its distributors, and respective representatives do not provide tax, accounting, or legal advice. Any taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor or attorney.
Pacific Life is a product provider. It is not a fiduciary and therefore does not give advice or make recommendations regarding insurance or investment products.
Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Insurance products are issued by Pacific Life Insurance Company in all states except New York and in New York by Pacific Life & Annuity Company. Product availability and features may vary by state. Each insurance company is solely responsible for the financial obligations accruing under the products it issues.
Variable insurance products are distributed by Pacific Select Distributors, LLC (member FINRA & SIPC), a subsidiary of Pacific Life Insurance Company (Newport Beach, CA) and an affiliate of Pacific Life & Annuity Company. Variable and fixed annuity products are available through licensed third parties.
No bank guarantee • Not a deposit • Not FDIC/NCUA insured • May lose value • Not insured by any federal government agency
For financial professional use only. Not for use with the public.