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IS AN ANNUITY RIGHT FOR YOU?
Annuities can be a great way to insure a great retirement.
WE KNOW YOU'LL BE ON A FIXED INCOME
LEARN HOW ANNUITIES CAN SUPPORT YOUR RETIREMENT
An annuity is a contract between an individual and an insurer that provides a guaranteed income stream for a set period of time or for the rest of your life. People typically buy annuities as part of a long-term retirement plan to secure payouts during retirement. Many annuities are designed to provide peace of mind by turning your retirement savings into predictable, periodic payments.
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WHAT IS AN ANNUITY
An annuity product is an agreement in which an insurance company receives a lump sum or a series of payments and agrees to pay the annuity owner either immediately or in the future. This can be structured as a deferred annuity or an immediate annuity. The payout you receive depends on the type of annuity you choose—such as fixed annuities, indexed annuities, or variable annuities. Fixed annuities offer a guaranteed minimum rate of interest, while indexed annuities link your returns to a market index, like the S&P 500. Variable annuities, on the other hand, are based on the performance of investment options such as mutual funds.
TYPES OF ANNUITIES?
There are several kinds of annuities, each with unique features. Fixed annuities offer stability, while variable annuities provide growth potential with investment options. Deferred annuities allow your funds to grow on a tax-deferred basis, while an immediate annuity begins payout almost instantly. Indexed annuities credit you with a return based on the market index and offer a guaranteed minimum return.
WHY PURCHASE AN ANNUITY?
Purchasing an annuity is a strategic move to enhance your retirement income. An annuity may offer guaranteed income, tax-deferred growth, and death benefits. These benefits are especially important for those concerned about running out of money in retirement. An annuity contract provides long-term security and allows you to receive payments for life or a fixed period. Insurance companies and brokers offer a variety of annuities designed to match your retirement goals.
PLANNING FOR RETIREMENT
Planning for retirement involves evaluating your needs and deciding whether to buy an annuity as part of your retirement plan. Annuities offered by trusted insurance providers can complement your retirement accounts and life insurance policy. Whether you want to supplement your Medicare benefits or replace a work-based income, an annuity can help provide financial stability in your later years.
WHAT TO KEEP IN MIND
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When you buy an annuity, you agree to a surrender period, which is the time you must wait before you can withdraw money without a surrender charge. Be aware of any fees, charges, and the terms outlined in the annuity contract. Many annuities offer a death benefit or allow for withdrawals, but annuities are complex products. Make sure you understand how the annuity makes money, the annuity payments, and the rate of return you might expect. Annuities are regulated by state insurance commissioners and in the case of variable annuities, by the Securities and Exchange Commission (SEC).
WHEN DO ANNUITIES PAY?
Annuity payments begin either immediately or at a point in the future, depending on the type of annuity. Payments may come monthly, quarterly, or annually and can be structured to continue for your lifetime or for a set period. The payout phase follows the accumulation phase and begins once the contract terms are met. Be aware that if you withdraw money early, you may end up paying a surrender charge or other penalties.
