What You Should Know About Annuities

What You Should Know About Annuities

When developing your long-term financial plan, consider annuities.

Annuities give you the opportunity for lifetime payments and tax-deferring earnings. We can assist you in mapping out your retirement strategy and explain how annuities can help your financial security.

Annuities produce a steady stream of income for a period of time – typically the rest of your life. Here are three things to know about annuities:

1. Annuities can be smart tax-planning tools.

Annuities are maintenance free and continue to generate income no matter what the economy does. Annuities can also help you avoid big tax bills in retirement. If you use a tax-deferred account, such as an IRA or 401(k) to fund the annuity, you’ll only pay taxes as you receive payments rather than all at once.

2. Learn the difference between immediate annuities and deferred-income annuities.

For a specified period of time or for the rest of your life, you can use an immediate annuity for regular payments. Immediate annuities are single payment annuities. A large sum of cash can be used for income for a specific time frame. These are not intended to offer liquidity or growth.

Deferred-income annuities will begin payments from a specific date. Usually these are purchased with payments or sometimes a single payment. These payments are typically made while the insured is working in order to receive payments during their retirement.

3. Not all annuity payments expire when you do.

Basic annuity payments stop after the owner dies, however there are other options available that allow payments to continue. You can opt for payments to continue until the end of your spouse’s life, if he or she outlives you.

You can also buy a period-certain annuity, which continues to make payments for a minimum number of years, even if you die. That way, your money isn’t lost forever if you die within the first few years of receiving payments.


Source: MySuburbanLife.com

FINRA Compliance Reviewed by Red Oak: 440432

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