What is an annuity?
An annuity is a contract with an insurance company designed for retirement purposes. It can provide you with guaranteed monthly income that’s protected and can last for as long as you live. The guaranteed lifetime income from an annuity can be used to supplement your other sources of retirement income, such as income from your savings, investments and Social Security.
Ask your financial advisor if a portion of your retirement plan should be invested in an annuity to help give you the peace of mind that you’ll have a protected income for the rest of your life.
Are there costs associated with guaranteed protected income?
There are a range of different types of annuities, all of which offer protected lifetime income. Depending on the type of annuity you choose and the benefits offered, there may or may not be direct costs. With certain annuities, expanded optional income protection is available for an additional cost.
Ask for a personalized illustration to determine if the benefit of protected income is valuable to you.
What if I need access to my money in an annuity?
With all investments, it is important to consider when you will need to access your money.
Some annuities carry withdrawal or surrender charges that may limit when you can access your money without incurring a charge. Be sure to ask how this works.
Be sure to ask what, if any, costs are associated with withdrawing money early; for example, in the case of unexpected expenses such as health care or long-term care needs.
If you want protected income to be received right away, make sure you understand all your options.
Can annuities help protect me from investment losses?
Annuities can provide you with monthly income that’s protected from market volatility.
Some annuities can also protect your principal from losses.
Be sure to ask about and discuss the variety of annuity options with your financial advisor.
How do I know that my protected income is safe?
All insurance companies have a rating for financial strength provided by rating agencies like A.M. Best, Standard & Poor’s, Moody’s, and Fitch. Ask your financial advisor about the financial ratings of the insurance company you are considering.
Are there other strategies for protected monthly income?
Ask your advisor if there are other investment strategies that provide protected lifetime income that can help mitigate the impact of rising costs of living and health care, market volatility, interest rate fluctuations, and longer lifespans.