Annuities

Description

Annuities are financial products designed to provide a steady stream of income, typically during retirement. Offered by insurance companies, annuities help individuals convert a lump sum of money—often from savings, investments, or a 401(k)—into reliable, long-term income that can last a lifetime. Whether you’re looking for guaranteed income, tax-deferred growth, or legacy planning, annuities offer customizable solutions to fit your retirement strategy.


How Annuities Work:

When you purchase an annuity, you make either a single payment or a series of payments. In return, the insurance company agrees to pay you income—either immediately or at a future date, depending on the type of annuity.


There are four main types of annuities:

1. Fixed Annuities – Offer guaranteed interest rates and predictable payments.
2. Indexed Annuities – Provide returns linked to a market index (like the S&P 500) with protection against market loss.
3. Variable Annuities – Allow you to invest in subaccounts that can grow based on market performance (with more risk).
4. Immediate Annuities – Begin paying income almost immediately, ideal for retirees needing income now.

Key Features:

  • Guaranteed Income: Many annuities offer income for life, protecting against the risk of outliving your savings.
  • Tax-Deferred Growth: Earnings grow tax-deferred until you withdraw funds, helping you accumulate wealth more efficiently.
  • Customizable Payout Options: Choose from lifetime payments, joint life payouts, or fixed periods.
  • Principal Protection: Fixed and indexed annuities protect your original investment from market losses.
  • Optional Riders: Enhance your contract with features like inflation protection, death benefits, or long-term care support.

Why Consider an Annuity?

Annuities are ideal for those looking to turn savings into income, especially in retirement when consistent cash flow is critical. They offer a unique blend of safety, growth potential, and predictability, making them an essential part of a well-rounded financial plan.


Who Annuities Are Best For:

  • Pre-retirees and retirees seeking lifetime income
  • Individuals concerned about market volatility
  • High-income earners looking for tax-deferred investment options
  • People without pensions who want guaranteed retirement income

Benefits at a Glance:

  • Lifetime Income You Can’t Outlive
  • Protection from Market Downturns
  • Tax-Deferred Growth for Retirement
  • Legacy Benefits for Loved Ones
  • Customizable Solutions for Every Stage of Life