Annuity/Retirement

An annuity is a contractual agreement with a company designed to help you save money and transform it into a guaranteed income for the future. It’s a key option when planning for retirement, primarily designed to ensure a flow of income and protect accumulated capital.

What are the most essential benefits?

• Guaranteed income.
• Deferred taxes: Money grows without paying income taxes.
• Flexibility in contributions (single or periodic payment)

What are the types of annuities?

• Fixed: As the name suggests, they have a fixed interest rate on the money invested, and guarantee a stable income.
• Indexed: They grow linked to the stock market index and have protection against losses.
• Variables: They carry risk depending on market behavior, but offer greater growth potential.

What are the advantages of an annuity over retirement plans?

• Guaranteed lifetime income: Unlike a 401(k), IRA, or savings account, an annuity can transform your money into a guaranteed stream of payments for as long as you live.
• Capital Protection: Unlike plans like IRAs or 401(k)s that rely on market performance, fixed and indexed annuities offer a guarantee against market losses.
• Payment Flexibility: Distributions from accounts like IRAs and 401(k)s are regulated through RMDs (required minimum distributions), starting at age 73, and with no guaranteed lifetime income option. Annuities allow for monthly, quarterly, annual, or lifetime distributions.