Annuities

Retirement planning often focuses on one question: How much have you saved? But there’s another question that matters just as much: How will those savings provide income once the paychecks stop?

An annuity is a contract issued by an insurance company. You provide a lump sum or make a series of payments, and in return, an annuity may provide growth potential, income, or both. Depending on the type of annuity, income can begin immediately or at a later date.

Fixed, fixed indexed, and income annuities each work differently, with their own features, costs, surrender periods, and restrictions. Contractual guarantees, when provided, are backed by the financial strength and claims-paying ability of the issuing insurance company. Annuities are not right for everyone—the important question is whether a particular annuity fits your goals, time horizon, and overall retirement plan.

If retirement is on the horizon, it may be worth taking some time to explore how guaranteed income could fit into your retirement strategy—and how an annuity compares with your other options.

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