Annuities

Annuity

An annuity is a contract with an insurance company that provides a guaranteed stream of income in exchange for a one-time payment or a series of payments, often used for retirement planning alongside Medicare services and life insurance. Money grows tax-deferred, and payments can begin immediately or be deferred to a future date. Key features include potential protection against market downturns, lifelong income options, and various types such as fixed, variable, and indexed annuities. 

Many people in FL, LA, AL, NC, SC, and TX choose annuities as part of their broader financial strategy, which may also include Medicare, Obamacare coverage, Dental, Vision, and Short Term Medical Products.

How Annuities Works:

  • Accumulation phase: 

The period when you pay into the annuity. This can be with a lump sum or regular payments. During this time, the money grows on a tax-deferred basis. 

  • Payout phase: 

The period when you start receiving payments. These payments can be immediate or delayed, and they can be for a set period or for your lifetime. 

Key features and benefits

Retirement income: 

Annuities can provide a predictable income stream, similar to a pension, to supplement other retirement saving and programs like Medicare. 

Protection against market volatility: 

Some annuities can protect against market downturns, ensuring you have a reliable income even if investments lose value. 

Lifelong income: 

Certain annuity types offer payments that can last for the rest of your life, which helps mitigate the risk of outliving your savings. 

Tax-deferred growth: 

The money in an annuity grows without being taxed until you withdraw it, which can help it grow faster over time. 

Types of annuities

  • Fixed annuities: 

Provide a fixed, guaranteed rate of return for a set period. They are similar to a certificate of deposit (CD) but are offered by an insurance company. 

  • Variable annuities: 

Allow you to invest in sub-accounts, such as mutual funds, and the value of the annuity fluctuates based on the performance of these underlying investments. 

  • Indexed annuities: 

Offer returns linked to a market index, like the S&P 500. They often have a guaranteed minimum return, providing potential growth with downside protection. 

Choosing annuities in states like FL, LA, AL, NC, SC, and TX can complement other insurance products such as Life Insurance, Dental and Vision coverage, Medicare Services, and Short Term Medical Products, helping secure your financial future.