Listen to this episode if you are considering purchasing an annuity, own an annuity, or to educate yourself about annuities.

In this episode we will talk about:

  • The several different types of annuities
  • Pros and Cons of buying one
  • Options if you currently have one

Show Notes

Look at annuities as insurance product not as an investment.

Types of annuities: 

  • Immediate Annuity
  • Deferred Annuity
  • Fixed Income Annuity
  • Variable Annuity 
  • Indexed Annuity

The terms immediate annuity and deferred annuity simply indicate when the distribution phase of the annuity begins. Both allow unlimited contributions, and both can provide, upon election, a continuous stream of payments for life.

With a deferred annuity, you make a lump sum or a series of premium payments and defer the payout until some time in the future. This is known as the accumulation period. The earnings in the annuity are not subject to taxation until distributed.

Immediate annuities allow you to convert a lump sum of cash into an income stream. They differ from deferred annuities in that they do not have an accumulation period. Thus, as a result they are funded with a single lump-sum payment rather than with a series of premium payments.  When an immediate annuity option is chosen, the distribution period begins within 12 months after the purchase versus with a deferred annuity it could be much later.  While an immediate annuity provides a monthly income until death, or certain time frame you choose. Your age, gender time frame, and upfront money will dictate the amount paid back.  Essentially like buying a pension.  Make sure you know all the costs involved and exactly how it works before buying one.  

Listen to the episode to learn more!

Call to Action

If you have an annuity do you understand it?  Is it the right fit for you?  If you’re not sure I would be more than happy to schedule a free initial consult to determine how we can provide value to you.  No strings attached.  Reach out today!