Learn About Annuities
Are you thinking about securing your financial future while still enjoying your present? An annuity might be a great option to consider. Annuities are designed to help you grow and protect your money, providing a steady stream of income you can count on later in life.
If you’ve ever wondered how annuities work, or whether they make sense for your situation, here’s a simple breakdown to help you understand your options.
What Is an Annuity?
An annuity is a financial product where you make a payment, or a series of payments, in exchange for a guaranteed income stream in the future. Many people use annuities as part of their retirement plan because they can offer stability, predictability, and peace of mind.
Unlike traditional savings accounts, annuities are built to provide income for life, meaning you can enjoy retirement knowing your money is still working for you.
Types of Annuities
There are two main types of annuities: immediate and deferred.
- Immediate Annuities: Payments begin shortly after you purchase the annuity. This option is ideal if you’re already retired or about to retire and want income to start right away.
- Deferred Annuities: Payments begin at a future date you choose. This allows your money to grow over time, making it a good option if you’re still planning and saving for retirement.
You can also choose how often to receive payments monthly, quarterly, semi-annually, or annually is all depending on what fits your lifestyle best.
When Do Payments Start?
Your payout timeline depends on the type of annuity you select. With an immediate annuity, payments begin almost right away. With a deferred annuity, you decide when your income starts, it could be 5, 10, or even 30 years down the line.
You’re in control of both when and how often you receive your payments.
What Affects Your Payout?
Several factors determine how much income you’ll receive from your annuity, including:
- The type of annuity you choose
- How much you contribute
- How long your funds grow before payout begins
- Your chosen payment frequency and contract terms
These details can all be tailored to your needs and financial goals, which is why it’s important to get guidance before deciding.
Benefits of Having an Annuity
Annuities offer several long-term benefits:
- Guaranteed lifetime income — you won’t outlive your savings
- Tax-deferred growth, meaning your money compounds faster
- Protection from market volatility, depending on the type of annuity
- Peace of mind knowing your income is predictable
Annuities can also help balance your retirement strategy by combining growth potential with security so you can enjoy your later years without worrying about running out of money.
If you’d like to learn more or see whether an annuity could fit your retirement goals, reach out anytime. We will be happy to walk you through your options and help you make a confident, informed decision about your future.
