Friendly Annuity Guidance for Retirement
Retirement should come with more confidence and fewer unanswered questions. We help individuals and couples understand how annuities work, what guarantees they may provide and what limitations should be considered before making a decision.
What Is an Annuity?
An annuity is an insurance contract designed to help accumulate money, provide income or accomplish a combination of both. Depending on the contract, an annuity may offer principal protection, tax-deferred accumulation or an option for guaranteed income.
Annuities are not the right fit for every person or every dollar. Contract terms, access to funds, surrender charges, fees and the financial strength of the issuing insurance company should all be considered.
Types of Annuities
Fixed Annuities
A fixed annuity credits interest according to the terms of the contract and may be appropriate for someone who values predictability and principal protection over direct participation in stock-market growth.
Fixed Indexed Annuities
A fixed indexed annuity credits interest using a formula connected to the performance of a market index. Your money is not invested directly in the index. Caps, participation rates, spreads and other contract provisions can limit credited interest.
What is the purpose of this money?
When might you need access to it?
How long is the surrender-charge period?
How is interest calculated and credited?
What guarantees are included?
Are there optional riders or additional costs?
How does the annuity fit with your other savings, income and emergency reserves?
Certain annuities are designed to convert a lump sum into a series of income payments. The amount and duration of income depend on the contract and the income option selected.
Income Annuities
Important Questions to Consider
Our Review Process
We begin with your goals—not a product. Jared will ask about your retirement timeline, income needs, liquidity needs and comfort with different types of financial risk. If an annuity appears appropriate, he will explain applicable options and important contract provisions in plain language.
You should understand both the potential advantages and the tradeoffs before deciding.
Frequently Asked Questions
Are annuities guaranteed?
Contractual guarantees are backed by the claims-paying ability of the issuing insurance company. Different guarantees apply to different contracts, so it is important to review the specific terms.
An annuity is an insurance contract. Some types have values or interest-crediting methods related to market performance, but the features and risks vary considerably.
Are annuities investments?
Will an annuity be right for all of my retirement savings?
Usually, no single financial product should be expected to meet every need. Liquidity, diversification, income and growth needs should be considered together.
Can I withdraw money from an annuity?
Many contracts permit limited withdrawals, but withdrawals may be subject to surrender charges, taxes or other contract provisions. An annuity generally should not replace an appropriate emergency fund.
Start With a Conversation
If you are curious about annuities, schedule a conversation with Jared. The goal of the first meeting is to understand your situation and determine whether further review makes sense.