Retirement Annuities

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Setting Yourself Up For a Successful Retirement

Successful retirement planning goes beyond just saving a set amount of money. It also includes creating guarantees that you won’t outlive your retirement nest egg.

A retirement annuity helps protect and grow your retirement income. It also can provide lifetime income.  These unique investment vehicles have flexible design options and can fit well into any retirement plan.   

What’s The Difference Between an Annuity and a Retirement Annuity?

There are many different types of annuities that help different people and serve distinct purposes.  Retirement annuities have special tax advantages that other annuity types do not.  These tax advantages help you go more income throughout retirement.

Tax Advantages of Retirement Annuities

An annuity that is part of a qualified retirement plan is considered a ‘Qualified Retirement Annuity.’  A qualified annuity allows you to load your investment with pre-taxed dollars, which allows your investment to compound and grow faster. You still pay taxes on these funds, but not until you begin taking income distributions in the future.

In other words, a qualified retirement annuity helps you grow more income throughout retirement.

Non-qualified annuities are not part of a formal retirement plan and do not have tax advantages.  

Delaying Your Taxes Is a Good Thing 

As just mentioned, a qualified annuity grows tax-deferred. You only pay taxes as you withdraw your funds from the annuity in the form of income payments.

One of the best benefits of a retirement annuity is that you control your income withdrawals. If you were to withdraw the entire lump-sum, you would pay taxes on the whole thing. By electing for monthly income payments, you can considerably reduce your tax obligation, saving you even more money throughout retirement.

Our qualified experts are here to help you understand these tax advantages. We’ll help you strategically design your annuity to maximize your retirement income and minimize your tax obligation. 

Designing Your Retirement Annuity 

There are many ways to customize your annuity to fit your life circumstances. 

Do You Need Income Now Or In The Future?

An Immediate Annuity forms through a single, one-time, lump-sum premium payment, making all the benefits of the annuity immediately available. This type of annuity is excellent for individuals looking to roll over other investments, such as a 401k or IRA.

A Deferred Annuity forms over time through a series of premium payments. These are the most popular way to invest annuity funds because it allows you to build up your retirement income over time without straining your budget.

Choose Your Interest Rate

You have the option of selecting between either a fixed or variable interest rate. The interest rate determines your risk level and the potential growth of your investment.

Fixed Interest Rate Annuities provide a guaranteed rate at which your investment will grow. It protects your investment from market fluctuations, and you’ll know exactly how much your money will grow before investing.

Variable Interest Rate Annuities provide a variable rate of return based on market fluctuations. This option offers higher yields; however, it also carries the risk of no growth or even capital loss.

Determining which type of annuity is right for you depends on your current financial situation and retirement goals. Those who have saved enough for retirement will likely be drawn to fixed interest rate annuities that protect your funds and grow at a moderate rate. Individuals who need to play catch up with their retirement savings have real growth potential and limited risk with a variable rate annuity. 

Retirement Annuities vs. Other Investments

As you near retirement, it’s like that your investments will become more conservative due to less time to rebound from financial loss.  Traditionally investors have turned to Bonds or CDs; however, these vehicles return little to no return and frequently fail to outpace inflation.   As a result, annuity investments continue to gain popularity by providing protection from market exposure and real growth potential for your retirement nest egg. 

Time To Explore Your Options

Navigating the complex world of retirement investing can quickly become overwhelming if going about it alone. The good news is help from a retirement specialist is right here, ready when you are.  

Our independent agency specializes in retirement investment products. We help educate our clients so they can make smart and informed financial decisions. 

We’re here to answer all your retirement questions and help you shop and compare the best financial products on the market.  

Our services are free. And there’s never any obligation when speaking with an agent. Explore your options today. Fill out the form on your screen to get started.