You’re saving to build a nest egg for retirement. But once you stop working, how will you get a regular income to live on? Annuities are a retirement vehicle that can help provide a steady, guaranteed stream of income in retirement. And, you can contribute to an annuity as part of your retirement strategy alongside any contributions you make to a 401(k) or an IRA.
Features: | Immediate | Fixed | Fixed index | Registered index-linked | Variable |
|---|
Can provide guaranteed income for life | yes ✓ | yes ✓ | yes ✓ | yes ✓ | yes ✓ |
Immediate start to income | yes ✓ | no | no | no | no |
Tax-deferred principal growth | no | yes ✓ | yes ✓ | yes ✓ | yes ✓ |
Inflation/cost-of-living adjustments | yes ✓ | no | no | no | no |
Potential for market-like returns on your principal amount that is tied to market or index performance | no | no | yes ✓ | yes ✓ | yes ✓ |
A level of protection against market losses | yes ✓ | yes ✓ | yes ✓ | yes ✓ | no |
Potential legacy for heirs | yes ✓ | yes ✓ | yes ✓ | yes ✓ | yes ✓ |
Note: The benefits listed are generally available for the type of annuity noted, but may not be included in a specific annuity holder’s contract: each annuity contract is unique and tailored to the owner’s needs.
There are several types of annuities, and many provide tax-deferred growth. How do you want your money to be invested? When do you need to start receiving income? Different annuities are designed to meet different needs.
For most people, annuities are an additional way to plan for retirement, along with an IRA, 401(k), or pension. They can help simplify the task of turning a large retirement savings nest egg into regular income. And, by providing a lifetime guaranteed income stream, they can help ensure you don’t outlive your money.
An annuity is a contract with an insurance company that can guarantee income for a set period of time (e.g., 10 years) or indefinitely (i.e., the rest of your life). Immediate annuity contracts begin paying within a year of purchase; deferred annuities let you build savings while you’re working and convert it to a stream of income later on.
An annuity can be an important part of your financial plan, along with life insurance and other investments. No matter where you are in your retirement strategy — or how much you need to save for other life goals — we can provide guidance on saving and investing to help you retire the way you want.
Whether you’re about to retire or still years away, you should consider getting an annuity if you want a steady, guaranteed monthly income to live on in retirement. An annuity contract is one of the only investments available that can guarantee you’ll have income for life.
Even if you’re maxing out your 401(k) or IRA, you can save even more — with the potential for tax-deferred growth — by purchasing a non-qualified annuity with no contribution limits.
If you’re 5-10 years from retirement and want guaranteed income after a certain age, you can get an annuity that will continue to grow tax-deferred until you need it.
If retirement has already started — or will this year — you can use a portion of your nest egg to purchase immediate guaranteed income for life or a set period of time.
Fixed income annuities turn your contributions into a steady stream of guaranteed retirement income — for your lifetime or a specific number of years.
2. Earn Interest on your investment
Fixed deferred annuities provide a guaranteed rate of return, while variable annuities provide potential growth based on increases in the stock market.
3. Get income when you choose
If you’re ready to retire, immediate annuities can start providing income soon after your premium payment; deferred annuities give you time to save more — and get more income down the road.
