Annuities

Annuities are financial products designed to provide a steady income stream, typically used as part of retirement planning. Offered by insurance companies, annuities allow individuals to invest a lump sum or make a series of payments, which then grow over time through interest or investment returns. Once you reach the payout phase, the annuity provides regular payments, either for a fixed period or for the rest of your life, offering financial security and peace of mind.There are several types of annuities, including fixed, variable, and indexed annuities, each offering unique benefits. A fixed annuity guarantees a set rate of return, while a variable annuity allows for greater growth potential based on the performance of underlying investments. Indexed annuities blend elements of both, tying returns to the performance of a market index like the S&P 500.

Whether you’re looking for a reliable income source or want to protect your savings from outliving your retirement, annuities can be a powerful tool to secure your financial future.

Frequently asked questions

What is an annuity and how does it work?

An annuity is a financial product that allows you to invest money with an insurance company in exchange for regular payments in the future. You can make a lump sum payment or contribute over time. The funds grow tax-deferred, and when you retire or reach the payout phase, the annuity pays you regularly, either for a set number of years or for the rest of your life.

What types of annuities are available?

There are several types of annuities:
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Fixed Annuity: Offers guaranteed interest rates and steady payments.
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Variable Annuity: Allows you to invest in sub-accounts similar to mutual funds, with payments depending on the performance of those investments.
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Indexed Annuity: Provides returns based on a market index, offering growth potential while protecting against market downturns.

How do annuities fit into my retirement plan?

Annuities can be a great tool for ensuring that you don’t outlive your retirement savings. They provide a predictable income stream, which can supplement other retirement savings like 401(k)s or IRAs, giving you more financial stability in retirement.