Learn About Annuities

For 24 years we've been helping clients plan for their retirement.
Find out if an annuity investment is right for you.

What is an annuity?

An annuity is a contract between you and an insurance company, under which you make a lump-sum payment or series of payments. In return, the insurer agrees to make periodic payments to you beginning immediately or at some future date.

Annuities typically offer tax-deferred growth of earnings and may include a death benefit that will pay your beneficiary a guaranteed minimum amount, such as your total purchase payments.

–http://www.sec.gov/answers/annuity.htm

What comes to mind when you think about saving for retirement? Most likely traditional IRAs, roth IRAs and 401(k) savings plans. But do you ever think of annuities? They, too, can increase your income for retirement and reduce your taxes along the way.

Annuities allow you to defer the taxes owed on your earnings. And by pushing your payout date into the future, you get the benefit of tax-deferred interest compounding. However, unlike IRAs, 401(k)s, and other retirement vehicles, there are no limits on how much you can contribute. As a result, you can build a sizable retirement nest egg.

Annuities are often lumped together when discussed in the news or by financial professionals. And that's a disservice. Why? Because there are many different kinds of annuities that perform and behave very differently from one another.

Some annuities look a lot like CDs you might purchase from a bank, allowing you to save as much money as possible. Another type provides payments to the investor much like a pension fund. Still others act a lot more like stocks or other securities. With that much range, it's difficult to talk about them as a group.

It is important to understand the various types of annuities in the market today to determine how they fit into your retirement investment portfolio.