If you're looking ahead to your retirement years, you may want to consider an annuity as part of your overall strategy. Annuities were designed to help you save, grow and protect your retirement assets, as well as provide a stream of steady income payments that will last as long as you live.
Which Type of Annuity is Right for You?
There are different types of annuities to choose from to help you reach your personal financial goals, including immediate, deferred fixed and deferred variable annuities. Finding one that's right for you depends on your individual needs.
In simple terms, an annuity is a contract you make with an insurer, where the insurer agrees to repay your money – plus the interest it earns – either in a lump sum or over a period of time you select. Annuities offer tax-deferred growth and can help provide a predictable source of income.
An immediate annuity can help you turn a recently received or inherited lump sum of money into retirement income for your lifetime, regardless of how long you live. Your income payments will begin right away.
A deferred fixed annuity pays interest at a fixed rate, which is usually established when you purchase your annuity. It may be right for you if you want guaranteed, dependable growth and plan to take income down the road, such as during retirement.
A deferred variable annuity has values that fluctuate over time, according to the performance of the investment options and fixed accounts selected. Investments in fixed accounts earn at least a minimum interest rate guaranteed in the contract.