Different Types of Annuities

There are many different types of annuities. There are immediate and deferred annuities, fixed and variable rate annuities, and indexed or non-indexed annuities. The best option for you will depend on your retirement goals, age, and available funds.

Below we review the various types of annuities to help you make a more informed investment.   

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Different Types of Annuities

Different Types of Annuities

The way you decide to fund your annuity is the first level of separation among annuity types. How you load your annuity with funds will determine if the benefits of your investment are immediate or deferred. 

Deferred Annuities

Deferred annuities load annuity funds over time through a series of premium payments. Often over several years. Only once the annuity is fully funded do the benefits become available, and you can begin receiving income payments. Deferred annuities allow you to budget and build up your retirement income over time. Your premium payment can be adjusted to fit your budget and is the main reason why this is the preferred way to purchase. 

Immediate Annuities

Immediate annuities load annuity funds with a single, one-time premium payment. This type of investment makes all the benefits of your annuity immediately available, and you can begin taking income distributions. Immediate annuities are less popular; however, they provide significant benefits for those who can afford to do so. These investments work well for individuals looking to roll-over other retirement investments such as 401k’s or IRA’s. 

Different Types of Annuity Rates

Fixed Annuities 

Fixed annuities provide a fixed rate of return on your investment. A fixed-rate annuity contract will state the annuity duration and the fixed interest rate at which your money will grow. Since the return on your investment is guaranteed to grow at the defined fixed rate, and not be subject to market fluctuations, these types of annuities are considered an ideal low-risk.investment.    

Different Annuity Types

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Variable Annuities

Variable annuities provide a variable rate of return on your investment, typically based on market fluctuations. Variable rates have the potential for greater gains when the market is high; however, dips in the market can result in no-growth or even capital losses. These are the most popular type of annuity investment due to the attractive financial returns and flexibility of contract design.  

Indexed and Non-Indexed Annuities

When you invest in an annuity, your funds will be placed either in or out of the stock market.

Indexed annuities fluctuate with the performance of their index while non-indexed annuities avoid market exposure altogether. Indexed annuities typically offer the potential for higher returns. And non-indexed annuities secure your investment from market loss. The right option for you will depend on your retirement goals and investment strategy.

What Type of Annuity is Right For Me?

As stated above, annuities come in many different types. And the details can undoubtedly seem complicated to individuals outside of the finance industry. We highly suggest you work with one of our independent agents to help you sort through your many annuity options.

Our agents will help you navigate your best annuity type and then help compare annuity companies nationwide to find your best rates. 

Working with Our Independent Agency

Our independent agents are not bound to any one insurance carrier. We represent all the top-rated annuity companies throughout the U.S. 

Our goal is to help you locate your best available options, regardless of carrier. 

We work for YOU, not the annuity company. 

Our service allows you to shop and compare annuity types, rates, and carriers all in one location. You’ll get unbiased advice and support from a knowledgable expert with years of industry experience.

See why thousands of people have chosen us to help them plan a successful retirement. Get started today with your free quotes and annuity illustration.

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