Discover the Value of an Annuity!
Retirement income strategies built to last. Learn how to turn your portfolio into steady income with tax efficiency, flexibility, and peace of mind.
Annuities can be complex and with so many various types: fixed, indexed, immediate, deferred, and variable, each with its own rules, fee structures, and payout options. We break down the complexity so you can make confident, informed decisions.
- Guaranteed Lifetime Income
- Principal Protection
- Tax-deferred growth
Worried About Outliving Your Money?
An Annuity May Help
Only 14% of Americans have a source of guaranteed lifetime income outside of Social Security.
— Source: Alliance for Lifetime Income, 2023
People are living longer, and traditional retirement income sources like pensions are disappearing. Traditional Retirement Accounts like employer sponsor 401ks typically don’t offer downside protection outside of a money market account. Annuities can provide guaranteed income for life, which directly addresses the fear of running out of money in retirement.
Annuities Unlocked: What They Are and When They Work
Fixed Annuities
Description: Provide guaranteed periodic payments that do not change over time.
Characteristics: 100% Downside Protection. No Fees. Typically offer a fixed interest rate, making them a low-risk option.
Fixed Indexed Annuities
Description: Returns are linked to a specific stock market index (like the S&P 500).
Characteristics: 100% Downside Protection. No Fees. Offers the potential for higher returns than fixed annuities while providing principal protection. Caps/Participation Rates/Spreads to market index (does not include dividends or capital gains)
Immediate Annuities
Description: Begin paying out income almost immediately after a lump-sum investment.
Characteristics: Typically used by retirees needing immediate income. Payments can be structured for a specific period or for the lifetime of the annuitant.
Deferred Annuities
Description: Payments begin at a future date, allowing the investment to grow over time.
Characteristics: Contributions can grow tax-deferred until withdrawals begin.
Variable Annuities
Description: Payments vary based on the performance of investment options chosen by the contract owner.
Characteristics: Allow for investment in a range of assets in the sub accounts (stocks, bonds, mutual funds). Potential for higher returns but also involves greater risk.
Case Study: Why Susan Chose a MYGA Over a CD Ladder
Susan, 68, recently retired and was sitting on $200,000 in savings. She didn’t want to risk it in the market but also wasn’t happy earning next to nothing in her savings account. Her bank suggested a CD ladder breaking up her money into 1-, 2-, 3-, and 5-year CDs to improve liquidity and average yield.
But then Susan learned about Multi-Year Guaranteed Annuities.
Instead of juggling multiple CDs with staggered maturities and varying rates, she could put $100,000 into a 5-year MYGA and lock in a higher fixed interest rate than any CD was offering. No annual tax reporting. No rate guessing. No renewal worries.
And unlike CDs, her MYGA could grow tax-deferred meaning she wouldn’t owe taxes on the interest until she actually withdrew it.
It gave her:
A higher guaranteed rate
Tax deferral during retirement (when every dollar counts)
Simplicity: one contract, one rate, one clear maturity
The result? Peace of mind, predictable growth, and less paperwork.
4 Reasons People Choose Annuities
Guaranteed Income for Life
Annuities are one of the few financial products that can provide income you can’t outlive. This makes them especially valuable for covering essential expenses in retirement and managing longevity risk
Protection from Market Volatility
Fixed and indexed annuities offer principal protection, meaning your money is shielded from market downturns. Even if the market dips, your annuity won’t lose value due to negative returns.
Tax-Deferred Growth
Earnings inside an annuity grow tax-deferred, allowing your money to compound without immediate tax drag. You only pay taxes when you withdraw funds, which can be advantageous in retirement.
Customizable Payout Options
Annuities can be tailored to your needs, whether you want income for a set number of years, for life, or even to include a spouse.
Case Study:
Why Mark and Linda Replaced Bonds for a Fixed Index Annuity with 100% Downside Protection
Mark and Linda, both 59, were approaching retirement and had done a solid job saving. But they were growing uneasy about the bond portion of their portfolio. Rising interest rates and market volatility made bonds feel less like the “safe” investment they once were.
They weren’t looking for high-risk growth but they also didn’t want to leave that portion of their savings exposed to losses but still want the ability to have some market participation.
Their agent introduced a strategy using a Fixed Index Annuity (FIA) a product that offers 100% downside protection with growth potential tied to the S&P 500, up to a cap 9% with no annual fees.
Instead of staying in traditional bonds, they moved part of their portfolio into the Fixed Index Annuity. It gave them:
Protection from market losses: their principal was guaranteed, no matter what the market did.
The opportunity to earn index credits when the S&P 500 went up, up to a cap.
Freedom from interest rate risk, unlike bonds, their value wouldn’t drop if rates rose.
Tax-deferred growth, helping their money compound more efficiently over time.
A way to create more predictable income later, while still keeping flexibility today.
Linda was not trying to hit a home run, we just don’t want to strike out. This gave them peace of mind and a clear path forward.”
Replacing their bond risk with an Fixed Index Annuity helped them transition into retirement with more confidence and less uncertainty.
From Questions to Confidence Your Annuity Game Plan
Step 01
One-on-One Income Review
A personalized session to review your current income sources, identify any gaps, and explore strategies like annuities for creating reliable, tax-efficient income throughout retirement. Tailored to your unique goals and timeline.
Step 02
Objective Product Comparisons
I use sophisticated, industry-specific software to access a full range of annuity products across multiple carriers. This allows us to compare rates, features, and costs side by side so you can make a confident, informed decision.
Step 03
Funding the Contract
Once we’ve selected the right annuity for your needs, the final step is funding the contract. This means transferring the agreed-upon premium into the policy. After contract issue signing the policy delivery receipt.
Case Study:
How Sam Locked In $70,000 of Guaranteed Retirement Income
Sam, age 58, planned to retire at 65. After reviewing her Social Security estimate, she knew she’d receive $30,000 per year starting at full retirement age. But her goal was clear: she wanted $70,000 in guaranteed income each year to fully cover her essential expenses in retirement.
That meant she needed to solve for a $40,000 income gap.
Sam had saved well, her total portfolio was $1,000,000. Her advisor recommended solving the gap using a Fixed Index Annuity (FIA) with an income rider designed specifically for lifetime income planning.
At the time, an A-rated insurance company was offering:
A 9.75% guaranteed roll-up rate on the income benefit base for seven years
A 6.27% guaranteed lifetime payout rate at age 65
A 1.15% annual rider fee on the income benefit base
The GLWB rider is designed as a way to generate lifetime payment amounts (LPAs) without incurring any applicable surrender charge or market value adjustment (MVA), even if the accumulation value is reduced to zero.
The advisor performed a premium solve to determine how much Sam needed to allocate to the annuity to generate $40,000 per year for life, starting at age 65.
The result: Sam needed to invest $332,620 into the FIA to secure the income she wanted.
This plan gave Sam:
$40,000 of guaranteed lifetime income from the annuity
$30,000 from Social Security, for a total of $70,000 per year
Confidence that her income needs were covered regardless of market performance or how long she lived
The ability to keep over $667,000 of her portfolio available for growth, emergencies or legacy planning
Even with the 1.15% annual rider fee, Sam felt the trade-off was well worth it.
Helping You Navigate Annuities with Confidence
Personalized Income Planning
Guidance is provided to help clients understand how annuities fit into their overall retirement strategy, aligning guaranteed income with lifestyle goals and existing income sources.
Transparent Education
Annuities are sophisticated financial contracts that include features such as surrender charges, caps, spreads, and optional riders which will be broken down in a way that’s easy to understand.
Tax-Efficient Strategies
Provides strategic insight into how annuities align with tax brackets and withdrawal planning, empowering clients to make informed and tax-efficient decisions.
Product Comparisons
We offer access to a wide range of A-rated insurance companies and diverse annuity products, allowing us to compare multiple options side by side. This ensures you get a solution tailored to your goals whether you’re focused on income, growth, or protection without being limited to a single carrier or product line.
Strategic Plan Integration
Annuities are integrated into your broader financial strategy so everything works together, not in isolation.
Annual Policy Reviews
Annuities aren’t “set it and forget it.” That’s why we conduct annual policy reviews to ensure your annuity continues to align with your goals, income needs and market conditions.
Frequently Asked Questions
How do you get paid? I welcome this question!
The insurance company pays my commission directly, so there’s no additional cost to you. The commission rate is set by the carrier based on the annuity type and duration. It’s built into the product design and cannot be negotiated or waived by the agent. Your contribution is not reduced by the commission. For example, if you purchase a 5-year MYGA for $100,000 and the carrier pays a 1.5% commission, your account value on day one is still $100,000.
What questions should I ask before buying one?
When reviewing an annuity or insurance product, be sure to ask about key details including fees and commissions, surrender charges, payout options, the financial strength rating of the carrier, and the risk level, whether the product is fixed or variable. It’s also important to understand the potential tax implications and what happens to the funds if you pass away early.
Can I lose money in an annuity?
Fixed and fixed index annuities protect your principal, so you won’t lose money due to market performance. Variable annuities, on the other hand, are subject to market risk, and your principal can lose value.
Do annuities have surrender charges?
Yes, A surrender charge is a penalty fee where your account will be less if you withdraw money from your annuity before a set period typically 5 to 8 years after purchase. It’s the insurer’s way to help keep price stability with their rates.
Do I have full access to my account value?
No, Annuities are generally considered illiquid compared to other financial products like savings accounts or mutual funds due to the surrender charges in the contract.
Can I withdraw anything without a penalty?
Yes, many annuities allow free withdrawals of up to 10% per year without triggering surrender charges. This varies by contract and carrier.
Are annuities taxed?
Yes, but only when you withdraw the money. Earnings grow tax-deferred and withdrawals are taxed as ordinary income. If you withdraw funds before age 59½, you may incur a 10% IRS penalty depending on the account’s tax classification.
What happens to my money if I die?
What happens to your annuity after you pass away depends on the type of annuity and the options you selected. In most cases, if your annuity has a designated beneficiary, any remaining value such as unused premium or accumulated benefits, will be paid directly to them, often avoiding probate. However, if you chose a lifetime income option without a death benefit or joint payout, payments may stop when you die. It’s important to review your contract and ensure your beneficiary designations are up to date.
What is the Free Look Period?
The free-look period is the length of time contract owner can receive a full refund of their contracts. If you cancel during the free-look period, you get everything you paid back, no questions asked. Free-look periods vary by state and most are anywhere from 10 to 30 days.
What is carrier risk?
Carrier risk refers to the possibility that the insurance company issuing your annuity or life insurance policy could become financially unstable or unable to meet its contractual obligations. Since annuities are backed by the claims-paying ability of the insurer, your money is only as secure as the company behind it.
To help manage this risk, it’s important to work with highly rated insurance companies, consider spreading large amounts across multiple carriers, and understand your state’s guaranty association protections, which typically cover up to $250,000 to $300,000 if an insurer fails.
Carrier risk is not the same as market risk, but it’s still a key factor to consider when choosing an annuity.
When an Annuity Might Not Be Right for You!
While they are powerful product, an annuity might not be the best fit if you need immediate access to your money, have a short-term investment horizon, or prefer full control and flexibility over your assets. Since annuities are designed for long-term income and often come with surrender charges and fees, they may not suit those focused on liquidity or aggressive growth. It’s important to match the product to your specific goals and financial situation.
