Understanding Annuities – A Complete Guide

Some people are looking for guaranteed income that lasts a lifetime, others are looking for spousal protection after death. An annuity can achieve both.

This personalized investment vehicle can remove financial uncertainty and provides income guarantees for the future. 

Are you worried about outliving your money?  

Even the best financial plans can fall short due to unexpected life events. If you’re unsettled about the uncertainty of your financial future, an annuity may be the ideal product for you. 

We help you shop all the top offers nationwide, which saves you both time and money on your investment. 

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Understanding Annuities

Annuities Explained

An annuity is a financial contract between you and an insurance company. These contracts can seem complicated, and sometimes they can be, however, the basics are very straightforward. 

What is an annuity?   An Annuity is a personalized investment vehicle that can guarantee income throughout retirement. Often for the rest of your life. In exchange for premium payments, an annuity contract can guarantee income payments in the future. There are many ways in which an annuity can be designed and customized to fit your retirement plan. And our team is here to help you do just that. 

How do Annuities Work? Your purchase an annuity through a series of premium payments made to an insurance company. The company then invest your money for a specified time defined in the annuity contract. Your investment funds will grow at either a fixed or variable interest rate. And at the end of the agreement, your funds are redistributed back in the form of income payments. Learn more about how annuities work here.

Types of Annuities – There are many different types of annuities. There are immediate and deferred annuities. Both of which can have either fixed or variable rates. These investments further differentiate by placing your funds either in or out of the stock market.

Below we break down the various types of annuities.  

Do You Need Income Now or In The Future?

The answer to this question will help you determine which type of annuity is best for you. 

Immediate Annuities – An immediate annuity provide immediate income. These investments require a single, one-time premium payment that fully funds your annuity, making all the benefits immediately available.   

Deferred Annuities – A deferred annuity allows you to purchase your investment over time through a series of premium payments. Income payments will begin upon the completion of the annuity purchase.  

Are You Looking For Safety or Growth?

Are you looking for a secure investment vehicle with little to no risk? Or are you seeking an investment with real growth potential?

Fixed Annuities- A fixed annuity provides a guaranteed fixed rate of return on your investment. Meaning you will know how much your money is guaranteed to grow before you invest. These products are considered an ideal low-risk investment and can fit into pretty much any financial plan. 

Variable Annuities – A variable annuity provides a variable rate of return typically based on stock market performance. These products have the potential for higher yields and can help you catch up financially if you’re behind in your retirement savings. Some of the newer market offerings allow you to participate in market gains and not participate in market losses, which make it an attractive retirement investment. 

Annuities Explained.  Best Annuities for Seniors.

Annuity Quotes & Illustrations

a complete guide to annuities

Place Your Annuity Funds Either In Or Out Of The Market

Indexed Annuities –  A indexed annuity invests your funds inside a stock market index such as the S&P 500 or the Dow Jones index. The growth of your investment is dependent on the performance of the indexed. Typically these products offer variable rates of return. 

Non-indexed annuities – non-indexed annuities are designed to mirror the stock market while keeping the funds protected safely from market exposure. Typically these investments will have a fixed rate of return; however, non-indexed annuities can also have variable rates.  

Annuities For Retirement 

Retirement Annuities –  Retirement annuities have additional tax advantages. A retirement annuity allows you to invest pre-taxed dollars, which helps your money to grow at a faster rate.  

Qualified Annuities – A qualified annuity receives tax advantages by being a part of a qualified retirement plan. The investment is purchased with pre-taxed funds to help you grow your money at a faster rate and can help you maximize your retirement savings. You will still pay taxes on your investment, but only once you begin taking income distributions. We help our clients withdraw income payments strategically to limit tax obligation and further stretch their retirement savings.   

Non-Qualified Annuities – A non-qualified annuity is purchased outside of a qualifying retirement plan. You make premium payments with post-taxed dollars. Therefore you only pay taxes on the capital gain (growth) of your investment during the life of the contract.   

Find out more about Qualified vs. Non-Qualified Annuities.

Annuities are Growing in Popularity Among Seniors

Seniors in America are facing financial challenges on all fronts. The rising cost of living, medical expenses, inflation, and economic volatility are all strain your financial nest egg.

An annuity can protect your retirement savings and offer guaranteed lifetime income. Securing predictable income will bring peace of mind to anyone worried about outliving their savings.

The crash of 2008 was a reminder of the importance of understanding the financial risks of retirement investing. Since then, annuities have become an attractive investment vehicle for people seeking to escape market volatility.

Review of Benefits

  • Tax advantages to help you keep more money throughout retirement 
  • Guaranteed income for the rest of your life
  • Flexible ways to fund and customize your investment
  • A low-risk investment vehicle with the potential for real growth
  • Can extend your Social Security benefits

How To Purchase An Annuity

Annuities are insurance products. They are offered and sold by insurance companies. Therefore you can make this investment through any licensed insurance agent.

Keep in mind that all insurance agents are not the same. Many agents are captive and can only offer one carrier’s products. Independent agents from SimplifiedSenior are not captive and can help you find your best investment option regardless of carrier.

Finding Your Best Annuity Offers

Practically every state has dozens of insurance companies with annuity offerings. Sorting through all of your available options will likely result in frustration and the possibility of making a less than ideal investment. 

Savvy shoppers won’t go about the shopping process alone. Instead, smart investors will work with an independent agency to help them shop and compare annuity companies nationwide to find the best rates and product offerings. 

Fining your best offer can dramatically impact your retirement living. 

Our independent agents are here to help you maximize your retirement by helping you find your very best market offers.  

We’ve helped thousands of clients maximize their retirement, and we’d love to help you too!

Get Started today with your free annuity quote and illustration.


Annuity Quotes & Illustrations

Annuity Quotes and Illustrations

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