What are Annuities?
Annuities are an important part of retirement and investment plans, designed to help your assets grow and provide a steady stream of income when you decide to retire. An annuity is an agreement between you and an insurance company, where you accumulate your funds in a tax advantaged manner and can later receive a series of payments provided by the insurance company for a determined period of time, either a number of years or for life, beginning right away, or in the future, whether your needs are.
If you are in a saving-money stage of life, annuities can help you:
- Meet your retirement income goals.
- Manage and diversify your investment portfolio.
- Have different options.
- Benefit your heirs.
- Plan your estate.
If you are in a need-income stage of life, annuities can help you:
- Have a lifetime income.
- Protect against outliving your assets.
- Protect your assets from creditors.
- Diversify investment risk.
- Tax deferral on investment earnings.
Different Types of Annuities:
Fixed annuities provide a guaranteed principal and guaranteed rates of return, plus tax benefits. All guarantees are subject to the claims-paying ability of the issuing company.
Variable annuities offer the potential for greater income based on market performance. Variable annuities are complex investment vehicles that are subject to market risk, including the potential loss of principal invested.