Annuity Income for Retirement

How Annuities factor into your retirement income plan

When it comes to retirement, gone are the days when you left your company after 40+ years, received a gold watch, and were sent off to live your golden years supported by your pension. Pensions are a relic of the past, but the good news is that you can essentially create your own pension by buying an annuity. An annuity is an investment vehicle that you purchase from an insurance company where you will receive guaranteed payments determined by the type of annuity you choose. There are three basic categories of annuities:

Variable annuity

A variable annuity is tied to market performance. This means that you have a good chance of reaping more than your initial investment. But on the flip side, if the market declines, your risk of losing money increases.

Fixed Annuity

A fixed annuity is locked into one interest rate for a specified period of time. The advantage is that it’s low-risk, and you will receive a steady stream of income. However, there are no adjustments for inflation, which means you may miss out on any gains from the market.

Fixed indexed annuity

With a fixed indexed annuity, you can invest in the market during the upticks without suffering any of the losses associated with declines. The benefits include higher returns with lower risk. Other advantages to annuities are that many of them are tax-deferred and some have “after-tax savings.” One major downside to annuities is that there can be “surrender fees” when you make a withdrawal before your vesting schedule is completed.

Add an Annuity to Your Retirement Plan

If you are looking for ways to plan your income as part of your retirement planning strategy, then we invite you to come in for a free consultation. In addition to helping you grow and protect your retirement investments, we also value client. Call us today at 614-760-0670 or learn more about annuities on our site.