ANNUITIES
Protect your future with guaranteed income for the rest of your life. Speak with our financial experts today to find the best options for your financial situation.
What is an Annuity?
An annuity is a contract between an individual and a life insurance company designed to provide a steady income stream, typically for retirement. The individual (annuitant) makes either a lump-sum payment or a series of contributions, and in return, the insurer disburses payments over time, either for a set period or for life.
How It Works:
- The annuitant pays a premium (lump sum or installments) to the insurance company.
- The insurer invests the funds, generating returns to finance future payouts.
- The annuitant receives regular, fixed payments at a predetermined time.
Benefits of Annuities:
- Guaranteed Income – Provides predictable payments for life or a chosen term.
- Tax-Deferred Growth – Earnings grow without immediate tax liability.
- Retirement Security – Helps manage longevity risk by ensuring consistent income.
- Flexible Payout Options – Choose between lump-sum withdrawals, fixed payments, or lifetime income.
Annuities are widely used for retirement planning, offering a reliable way to convert savings into a stable income while potentially minimizing tax burdens on accumulated wealth.
Types of Annuities
Annuities come in two primary types: Immediate Annuities and Deferred Annuities, each serving different financial goals.
Immediate Annuity - Instant Income
Immediate Annuities – Instant Income
An Immediate Annuity provides a guaranteed income stream immediately after a lump-sum payment. Payments can be fixed or increasing and continue for a set period, lifetime, or the longer of two lives (for joint annuities).
Key Features:
- Payments Start Immediately – Usually within 30 days of purchase.
- Best for Retirement Income – Ideal for individuals seeking immediate financial security.
- Fixed or Lifetime Payments – Ensures predictable cash flow.
Best For: Retirees or individuals needing instant income from their savings.
Deferred Annuity - Grow Savings for the Future
Deferred Annuities – Grow Savings for the Future
A Deferred Annuity allows individuals to accumulate savings over time before receiving payments. Funds grow tax-deferred until the payout phase, where the annuitant can choose lump-sum withdrawals or convert to an immediate annuity.
Key Features:
- Tax-Deferred Growth – Earnings accumulate without immediate taxation.
- Flexible Payout Options – Choose lump sum, fixed payments, or lifetime income.
- Ideal for Long-Term Planning – Helps grow savings before retirement.
Best For: Individuals planning for future retirement income or those looking for tax-deferred savings.
Both annuities provide financial security, but the choice depends on whether you need income now or prefer to grow funds for later use.
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