Annuities are financial products designed to provide a steady stream of income during retirement. There are different types of annuity products available in the market, each with unique features and benefits. In this blog post, we will discuss the different types of annuity products for retirement, their benefits, drawbacks, and who they are best suited for.
Fixed Annuities
Fixed annuities are financial products that ensure a guaranteed interest rate for a set period, typically ranging from one to ten years. They offer a steady income stream in retirement, making them popular among retirees seeking stability. Additionally, fixed annuities provide tax-deferred growth, meaning the earned interest is taxed only upon withdrawal.
Variable Annuities
Variable annuities are financial products that provide investment choices for retirement income. They enable retirees to select from various investments, including stocks, bonds, and mutual funds, with the potential for higher returns than fixed annuities. Variable annuities are appropriate for retirees who want flexibility in their investment mix and are willing to take risks that could lead to swings in performance.
Indexed Annuities
Indexed annuities are financial products that ensure a minimum return rate, with the possibility of higher returns based on a specific stock market index performance. Indexed annuities are financial products that ensure a minimum return rate, with the possibility of higher returns based on a specific stock market index performance. They offer a compromise between fixed and variable annuities, assuring a minimum return while enabling retirees to partake in the stock market’s potential gains.ormance. They offer a compromise between fixed and variable annuities, assuring a minimum return while enabling retirees to partake in the stock market’s potential gains.
Immediate Annuities
Immediate annuities are financial products that yield an income stream right after purchase. They suit retirees with a lump sum who want a regular income. Immediate annuities guarantee a fixed income stream for a specific period, often five to twenty years or until the retiree’s death.
Deferred Annuities
Deferred annuities are financial products that offer an income stream at a future date. They provide tax-deferred growth and enable retirees to accumulate savings over time. Deferred annuities can be either fixed or variable, depending on the retiree’s preference.
Safe Harbor Can Help
If you’re looking to add an annuity to your retirement plan, SafeHarbor Retirement Group can help. Our team has decades of experience in helping people plan for their retirement. Give us a call at 614-760-0670 or visit our website to set up a complimentary consultation!