Annuities

 

An income annuity allows you to convert part of your retirement funds into a stream of guaranteed lifetime income payments using a single lump- sum of money called “premium”, or through flexible premium payments over time, depending on the type of Annuity selected.

 Annuities are attractive to some investors because they offer the ability to build tax- differed savings, can help to help protect the money that you've already saved, and generate a steady stream of income in retirement.

 

Fixed annuity. The insurance company promises you a minimum rate of interest and a fixed amount of periodic payments. Fixed annuities are regulated by state insurance commissioners.

Variable annuity. The insurance company allows you to direct your annuity payments to different investment options that are held inside the variable annuity. Your payout will vary depending on how much you put in, the rate of return on your investments, and expenses. The SEC regulates variable annuities

An indexed annuity This annuity combines features of securities and insurance products. It is a special class of annuities that yields returns on contributions based on a specified equity-based index. These annuities can be purchased from an insurance company, and similar to other types of annuities, the terms and conditions associated with payouts depend on what is stated in the original annuity contract.

 

A variable or fixed deferred annuity can include  a GLWB ( Guaranteed Lifetime Withdrawl Benefit) allows access to your investment. When you purchase this type of annuity, your future income amount is guaranteed to increase on each contract anniversary for a set period of time or until your first lifetime withdrawal, whichever comes first. You will know how much income you (or you and your spouse for joint contracts) will receive each year at any age you decide to take withdrawals. While each annuity offers an attractive blend of features, determining which annuity or a combination of annuities is appropriate for you is part of building a diversified income plan.