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What is an Annuity?


An Annuity is a contract with a life insurance company with the purpose of distributing guaranteed income for life during retirement. There are a variety of them that serve different needs.*



Benefits of an Annuity


  • Protection of your money

  • Guaranteed income for life during retirement

  • You can leave a benefit for your beneficiaries if you pass away

  • It's pretty customizable!



Things to be aware of when it comes to Annuities:


  • It's not usually liquid or easy to access if you need the money

  • Not best for short term goals most of the time

  • Consult a professional that can offer a variety of companies to choose from so they can tailor the solution for your needs

  • Watch out for fees, it isn't necessarily a bad thing, just make sure to know what they are first and that it fits your goals and needs



Immediate Annuity


  • It's not usually liquid or easy to access if you need the money

  • Not best for short term goals most of the time

  • Consult a professional that can offer a variety of companies to choose from so they can tailor the solution for your needs

  • Watch out for fees, it isn't necessarily a bad thing, just make sure to know what they are first and that it fits your goals and needs



Deferred Annuity


This is for someone who is looking to accumulate retirement income and to turn it into an income stream during retirement. This would not be for someone who wants to start taking income right away.



How do I fund them?


Typically with periodic payments called premiums (multiple-times) or a lump sum premium (one-time).



How do I take income when I am ready?


Usually you let the insurance company know and they may have a form to fill out. A more specific answer would be based on what the company requires. Ask your financial professional for more information on this.



Summary


An annuity could be a great solution to a retirement strategy. Consult a financial professional to see if an annuity makes sense for you.



Have questions?



*For education purposes only. This is not financial, legal or tax advice. Consult the appropriate professional before implementing a strategy to make sure you find the right solution for your specific needs.

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