Equitable Structured Capital Strategies PLUS® works by allowing you to invest to accumulate value on a tax-deferred basis using specific investment options within the structure of a variable annuity, which is designed as a long-term tool for retirement savings.
Understanding this financial product begins with its primary function: wealth accumulation. According to the provided information, In Structured Capital Strategies PLUS®, you invest to accumulate value on a tax deferred basis in one or more Variable Investment Options and/or in the Structured Investment Option. This means the money you put into the product has the potential to grow over time, and taxes on that growth are typically postponed until you withdraw the funds.
Key Investment Components
The accumulation of value within Structured Capital Strategies PLUS® is achieved through specific investment choices available to you:
- Variable Investment Options: These are investment options that function similarly to mutual funds, offering exposure to various asset classes.
- Structured Investment Option: This option provides a different approach, often linked to the performance of market indices, potentially with features like downside protection and upside limits over a specific term.
You have the flexibility to allocate your investment across one or both of these types of options to build your value.
Tax-Deferred Accumulation
A significant feature mentioned is the ability to accumulate value on a tax-deferred basis. This means that any earnings or growth within the investment options are not taxed annually. Taxes are typically only incurred when you make withdrawals or receive income payments from the annuity later, often during retirement when you might be in a lower tax bracket. This tax deferral can potentially enhance long-term growth compared to a taxable account, assuming all other factors are equal.
What is it? A Variable Annuity
The reference also clarifies the nature of this product: "What is a Variable Annuity? A variable annuity is a long-term financial product designed to help you save for retirement." This positions Equitable Structured Capital Strategies PLUS® as a retirement savings vehicle. As a variable annuity, its value fluctuates based on the performance of the underlying investment options you choose. Variable annuities are contractual products between you and an insurance company, intended for long-term financial goals, particularly retirement income.
In summary, Equitable Structured Capital Strategies PLUS® facilitates tax-deferred growth by allowing investment in Variable Investment Options and/or a Structured Investment Option, functioning as a variable annuity intended for long-term retirement savings.
Here's a brief look at the investment pathways mentioned:
| Investment Pathway | Purpose | Tax Treatment |
|---|---|---|
| Variable Investment Options | Accumulate value through market exposure | Tax-Deferred |
| Structured Investment Option | Accumulate value, often market-linked | Tax-Deferred |
