Secure Your Financial Future
Secure your financial future with an annuity, providing guaranteed income, protection against market volatility, and peace of mind throughout retirement.
Types of Annuities Understanding the differences between these types of annuities can help investors choose the one that best aligns with their financial goals, risk tolerance, and retirement needs.
-
Fixed Annuities: In a fixed annuity, the insurance company guarantees a fixed interest rate for a specified period. This type of annuity provides predictable income and protection against market volatility. Fixed annuities are suitable for investors seeking stable, guaranteed returns.
-
Variable Annuities: Variable annuities allow investors to allocate their funds among various investment options, such as mutual funds. The returns on variable annuities are not guaranteed and can fluctuate based on the performance of the underlying investments. Variable annuities offer the potential for higher returns but also involve greater risk.
-
Indexed Annuities: Indexed annuities are hybrid products that combine features of both fixed and variable annuities. The interest rate credited to indexed annuities is linked to a specific market index, such as the S&P 500. Indexed annuities offer the potential for higher returns than fixed annuities, with some downside protection against market losses.
-
Immediate Annuities: With an immediate annuity, the investor makes a lump-sum payment to the insurance company in exchange for guaranteed income payments that start immediately or within a short period. Immediate annuities are often used to provide income during retirement.
-
Deferred Annuities: Deferred annuities allow investors to accumulate funds over time before receiving income payments. During the accumulation phase, the investor’s money grows tax-deferred, meaning they do not pay taxes on the earnings until they start receiving distributions. Deferred annuities can be either fixed, variable, or indexed.
-
Longevity Annuities (or Deferred Income Annuities): Longevity annuities are designed to provide income starting at a future date, typically in advanced age, to protect against the risk of outliving one’s savings. Investors make a lump-sum payment or a series of payments in exchange for guaranteed income later in life.
-
Qualified Longevity Annuity Contracts (QLACs): QLACs are a specific type of longevity annuity that meets certain IRS requirements. They allow investors to use a portion of their qualified retirement savings, such as funds from a 401(k) or IRA, to purchase guaranteed income for later in life while deferring required minimum distributions (RMDs) from the invested amount.