Annuities
Understanding Annuity Benefits
Learn More About Annuities
Understanding Annuity Benefits
Utilizing annuity benefits in retirement could allow you to receive a series of guaranteed* payments on a set schedule, while protecting a portion of your retirement savings. Essentially, an annuity is a contract with an insurance provider. Your individual contract will include the specific details. For example, you’ll get to decide whether payments will be received monthly, quarterly, or annually. The crediting method will also be different depending on the contract.
Furthermore, there are different types of annuities. Fixed annuities do not lose money in the event of a stock market drop. Variable annuities, on the other hand, have the potential for higher returns than fixed annuities, but they may lose money if the market falls. Finally, fixed indexed annuities (FIAs) offer both protection (backed by the claims-paying ability of the carrier) and indexed interest at a reasonable rate of return.** For this reason, we believe that an FIA is the most useful annuity product and the “best of both worlds.” Interested in learning more? Contact us today.
UNDERSTAND YOUR OPTIONS
Fixed Indexed Annuity Benefits
An FIA provides the benefit of protecting your principal even if the market drops. This is because the insurance company is required to keep your money safe in a reserve. However, an FIA’s interest rate is also determined by the performance of a market index. This means that if the market rises, you can expect higher** returns. However, if the market falls, you will not lose any money.* The contract and the strength of the insurance company will protect you.
Stages of an Annuity
An annuity contract has two main stages: accumulation and distribution. These are crucial in understanding annuities and annuity benefits.
- During the accumulation stage, you contribute a set amount of money to the annuity and leave it to grow over time. Interest is tax-deferred, and based on the performance of a market index or multiple indexes.
- The distribution stage begins when you withdraw money from your annuity. When you can begin taking payments will also be outlined in the contract. Additionally, you can set up the rate at which you want to receive payments.
Are you interested in learning more about these products? Reach out to us. Using annuity income for retirement is one of the topics we cover at our educational seminar events. Or, if you want to get right to the point, you can schedule a one-on-one meeting with us. We can discuss your specific situation and goals. Is an FIA athe right option for you? Let’s discuss it together.
