Hello I am fred Orentlich and I will be taking about business annuities. As a small business owner, you understand how important it is to plan for your own financial future. You also want to attract and retain skilled employees by offering a retirement savings account. Business annuities can help a business owner establish individual retirement accounts and fund these arrangements with deferred annuities. What is an annuity? An annuity is a contract between an insurance company and an annuity owner. In exchange for a purchase payment, or series of payments, the insurance company guarantees to pay a stream of income in the future.1 How is an annuity used? Funding an individual retirement arrangement requires a long-term investment. A deferred annuity can be broken down into two phases: an accumulation phase and an income phase. During the accumulation phase, the accumulation value of the annuity may grow. Once the contract is annuitized, it begins to pay a guaranteed stream of income for life or a certain period to time. What are the benefits of an annuity? The benefits of deferred annuities include payment of a guaranteed stream of lifetime income, potential to accumulate savings on a tax-deferred basis and beneficiary provisions. What are the different types of arrangements that can be funded by annuities to help meet the needs of your business? Savings Incentive Match Plan (SIMPLE-IRA) A written salary reduction arrangement that allows eligible employees to contribute to an Individual Retirement Account (IRA) in their name. Employers are required to make annual contributions for each eligible participant. Simplified Employee Pension Plan (SEP-IRA) A written agreement that allows an employer to make contributions to IRAs for all eligible employees.