If you are wondering “what is an annuity?”, it’s likely that this tax-deferred accumulation vehicle has been recommended to you by a friend or financial professional. Annuities can be a complex subject because there are multiple types and varieties, including variable annuities, fixed annuities, fixed-indexed annuities, immediate annuities, and deferred annuities. In short, an annuity is a long term insurance contract, which is designed to provide the owner with a guaranteed stream of income in the future. Depending on your personal circumstances and retirement objectives, certain annuities may be a smart addition to your financial plan.
What are the benefits of annuities?
1. Annuities offer an alternative way to save money for income in retirement
2. Annuities can help you reduce risk by protecting your savings from market loss
3. Annuities offer growth potential and opportunity for accumulation
What is the difference between fixed, fixed-indexed, and
variable annuities?
There are varieties and differences between products within each of these categories, however, before you consider purchasing any particular annuity, you should know the differences between these three main types.
● A fixed annuity guarantees the interest rate you will receive and the payment amount you will receive
● A fixed-indexed annuity gives you the potential to earn interest tied to the movement of an external market index, such as the NASDAQ or S&P500, without ever being invested in the market
● A variable annuity offers an investment component and you can make or lose money based on the movement of the market
Are annuities good options?
Again, there’s no one-size-fits-all investment that works for everyone. When you have money that you want to protect from market loss in order to guarantee income for your future, you should at least consider your options. Your financial professional can assess your current retirement income strategy as well as your goals and determine if an annuity may benefit you. Absolute Retirement Solutions is an independent insurance agency that offers a variety of annuities , based in the Kansas City metro area. Contact us to speak with a qualified professional and find out how we can help you lay the foundations for your retirement. (913) 254-3030
Insurance and annuity guarantees are backed by the financial strength and claims-paying ability of the issuing company. They involve limitations, fees and charges including surrender penalties for early withdrawals.