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Consider the retirement plans you already have in place and your likely income needs—a trusted financial advisor can help you decide if a deferred annuity makes sense for you. Keep in mind, once purchased, for a number of years, deferred annuities are subject to surrender charges if you change your mind and withdrawals beyond a certain percentage of your accumulated value are subject to withdrawal charges.

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Invest today for a reliable income tomorrow

An annuity contributes to your peace of mind. Set aside some of the money you make during your peak earning years—or contribute cash from an inheritance, insurance benefit, or the sale of a business or home—to provide a steady source of income for as long as you live.

Bear markets and corrections and recessions, oh my! Fixed deferred annuities earn a guaranteed minimum rate of return during the accumulation phase, no matter what the stock market does.

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A retirement plan for your whole life

While investments in your retirement portfolio may offer higher possible returns, a fixed, deferred annuity provides a steady source of accumulating value that can convert to an income stream covering some of your most predictable expenses. As Social Security remains questionable, the cost of living climbs, and medical breakthroughs offer a healthier and longer life, you’ll want to make sure your cash flow can stretch. How much will you need? Consider the averages:

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A rule of thumb is that you’ll want replace between 70% and 90% of your working income to maintain your standard of living during retirement years.

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Households run by someone 65 years or older spend an average of $3,800 per month (Bureau of Labor Statistics data, 2016)

In 2020, the average American could expect to live to 77.8 years (National Center for Health Statistics, 2020)

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Key advantages of fixed annuities

Annuities let you convert your accumulated value into an income stream you can’t outlive.

 

Interest rates guaranteed

Your principal is guaranteed because your contribution earns a minimum guaranteed interest rate prior to the payout phase. It grows at a rate you can depend on, with higher declared interest rates also possible. So, unless you make withdrawals, the value of your annuity can only increase prior to beginning payouts.

 

Money grows tax deferred

Funds accumulate on a tax-deferred basis. This means that like 401(k)s and IRAs, you won’t pay taxes on any annuity earnings until you start receiving income payments or make withdrawals. By timing your payouts to begin when you’re likely to be in a less costly tax bracket, you may enjoy more of what you’ve worked so hard to earn.

 

Choose how you get your money

Choose to receive payments that last as long as you live, for a fixed number of years, a combination of lifetime with a fixed number of years guaranteed, and several more. Prior to maturity, receiving your accumulated value as a lump sum is also an option. Tax consequences are always an important consideration and working with a trusted financial advisor is a good idea.

 

Death Benefit

During the accumulation phase, your named beneficiaries will receive the accumulated value of your deferred annuity if you die. These funds avoid the costs, delays and publicity of probate.

 

Withdraw some of your money without withdrawal charges

The percentage varies, but during the accumulation phase and after the first year, you can withdraw some of your money without any withdrawal charge to pay for unexpected expenses or splurges.