Annuities come in several forms and one size does not fit all.
Immediate Annuities are those that guarantee a payment for your life and or a certain period of time. These type of annuities are used when companies set up pension plans or when a lottery winner chooses the lifetime payment option instead of a lump sum.
Deferred Annuities are annuities are that used to “park” money so that it can grow safely. These will be either fixed, fixed Indexed or Variable.
Fixed Annuities will pay a guaranteed specific interest rate for a specified period of time. Fixed Index Annuities will be linked to a particular index and the most popular is the S&P 500. These annuities are credited interest based on the market returns, but they also have minimum guarantees. Variable Annuities hold actual stocks and are at risk for loss, but have more potential for gains.
Fixed Indexed Annuities have become extremely popular due to the safety, guarantees and potential growth they offer with less risk. These annuities can be designed to pay a guaranteed future income. Some of them have benefits for long-term care so they provide a dual benefit.
Choosing the type of annuity that is right for you depends on your goals and risk tolerance.
Contact us if you would like to see what the right annuity could do for your life.