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WHAT ARE ANNUITIES
Annuities are financial products designed to protect your money, grow it over time, and turn it into a steady stream of income you cannot outlive. They are commonly used for retirement planning.
The main goal is simple, create income you can depend on for the rest of your life.
TYPES OF ANNUITIES
FIXED ANNUITIES
A fixed annuity gives you a guaranteed interest rate with no market risk.
- How it works
- You deposit money
- The insurance company credits a fixed rate
- Your money grows steadily
*Example growth
- Year 1: $104,000
- Year 3: about $112,000
- Year 5: about $121,000
Who it is for:
*People who want safety
*People near retirement
People who do not want market risk
INDEX ANNUITIES
What it is
An indexed annuity grows based on a stock market index, like the S&P 500, but protects you from losses.
How it works
*If the market goes up, you earn a portion of the gain
*If the market goes down, you do not lose money
Growth example
- Year 1: Market up 10 percent → credited 6 percent
- Year 2: Market down 8 percent → credited 0 percent
- Year 3: Market up 12 percent → credited 7 percent
Who it is for
*People who want growth and protection
*People worried about losing money in the market
INCOME ANNUITIES
What it is
An income annuity turns your savings into a paycheck that lasts for life.
How it works
*You deposit money
*The annuity pays you monthly income
*Income can last for life
Income Flow Example
Savings → Annuity → Monthly Income
$300,000
Turns into:
Lifetime monthly income
Even if you live 30 years, income continues