How much guaranteed lifetime income do you have?

An annuity is a contract between you and an insurance company to cover specific goals, such as principal protection, lifetime income, legacy planning or long-term costs.

There are many different forms of annuities.  

  • Fixed Annuity

  • Multi-Year Guaranteed Annuity 

  • Fixed Index Annuity

  • Variable Annuity

  • Deferred Annuity

  • Immediate Annuity

Annuities became popular in the U.S. during the Great Depression, when people began to worry about the stock market volatility endangering their retirement.  Today, with pension plans becoming less common, many retirees are looking toward annuities as an option to replace or create income streams.

Annuities are designed for long-term financial goals. Withdrawals are subject to income tax, and withdrawals before age 59 1/2 may be subject to a 10% early withdrawal federal tax penalty from the IRS.  Earnings on annuities while in deferral grow tax deferred. 

There is often much confusion on how annuities work. Some individuals have formed their opinion based primarily on information they receive from someone who is not licensed, experienced, or trained in this field.  Annuities can be designed to pay income for life, or life with a period of years guaranteed, and often life with refund to beneficiaries.  I encourage everyone who considers annuities for some portion of their asset allocation to get the information from a licensed individual.

Annuities aren't for everyone, but if you want the security of a stream of income you can't outlive, or you want to provide for your spouse or heirs, you may benefit from an annuity. 

You buy an annuity because it does what no other investment can do: "provide guaranteed income for the rest of your life no matter how long you live."