There are several types of annuity products available to choose from. So whether you’re looking for income options, legacy planning tools, or spousal protection, your financial professional can tailor a plan to meet your specific goals.

Variable: There’s the potential for more earnings, but you also take on more risk.

Registered index-linked: Exposure to downside risk is limited, and there is potential for increased earnings based on index growth.

Fixed: Your investment grows based on a guaranteed rate of return.

Immediate: Convert a lump sum of money into a stream of income.

Fixed indexed: The potential for increased earnings is based on index growth, but there’s still downside protection.

Annuities can be an excellent investment for you if your situation is such that the income from traditional sources does not meet all your needs.

Think of an annuity as a long-term investment with monthly payments. It is a predictable stream of income that pays out money over time, so you don’t need to worry about running low on funds or having to use other assets.

One of the key benefits of an annuity is that it allows the investor to save money without paying taxes on the interest until a later date. In addition, unlike 401(k)s and IRAs, annuities have no contribution limits.

Like any investments, annuities carry risks. For example, if you pass away before the payout period, you miss out on annuity payments. In addition, taking money out of your annuity account may not be easy after you’ve invested it. Therefore, investors should research the insurance company that is underwriting the annuity. Risks include:

• Missing the income benefit. The idea behind annuities is that you save money now to have an income stream for the rest of your life. You would miss out on that long-term benefit if you suddenly pass away. Some annuities allow you to designate a beneficiary, but they may come with an extra cost.
• Tying up money you may need. Once you’ve invested your money in an annuity, it can be difficult to access or cash it out if you suddenly need those funds. For example, some immediate annuities take away access to your principal after you have invested it, even though the payments begin immediately.
• Insolvent insurance companies. Because an annuity is a long-term investment, you’ll want to ensure the company you purchase from is around for the long term. Investors should investigate potential annuity providers’ credibility, history, and credit standing.

Consult with us to understand annuities better. Contact us today to know more about how annuities can help!