Annuities are another possible way to prepare for retirement. An annuity is a contract between an insurance company and you, requiring that the insurer makes payment to you (either in the future or immediately). You’d have to buy an annuity by making either a series of payments or paying it all up front. Then, your payout may come back to you as a series of payments over a period of time or as one lump-sum.
Annuities are bought to help mange income in retirement and provide three different benefits:
- Death benefits so that if you pass before you start receiving the payments, your beneficiary will then receive that payment.
- Periodic payments. These payments could be for the rest of your life or even the life of your spouse or children.
- Tax-deferred growth. You don’t have to pay any taxes on the investment gains or the income from the annuity until you withdraw the funds.
There are three basic types of annuities: fixed, variable and indexed. Many look to annuities for retirement funds when they no longer are working. These periodic payments can help lessen the load when it comes to living expenses since a regular stream of payments can be chosen as a payout option.
If you’d like to learn more about annuities and see if they’re the right retirement solution for you, give us a call! We’re very knowledgeable about annuities and their benefits and are more than happy to help you choose this route if it aligns with your retirement plans.
*Note: Not all benefits are available in every state, but we can provide further information on this once you contact us.