Setting yourself up for success during retirement takes a bit of research and work to do the job right. Annuities are an extra step you can take to ensure your money works harder for you, especially in the event you outlive your current retirement efforts. You can think of annuities as a tax-deferred subsidy for your retirement package. Let’s talk about how annuities work and the various types we offer at Christina Frey Insurance Agency.
What are annuities and how do they work?
Annuities can supplement your current retirement funds with a steady stream of income, guaranteed. Essentially, you invest a sum of money into an account that then accumulates interest until your payout or retirement period. You can contribute to your annuities in monthly or lump sum payments, similar to premiums on insurance plans. Once your investing period or accumulation phase is over, and you enter retirement, you will begin to receive payouts on those earnings.
In addition to payouts that help supplement your retirement, you’re able to offer your payments to your spouse or loved ones should you pass away prematurely. This payment period will continue until the previously-determined date you’ve chosen. There are many different types of annuities including Single-Premium, Deferred, Flex, Immediate, and Equity-Indexed Annuities. Let’s take a look at each of them briefly and see which may be right for you.
Types of Annuities We Offer:
1. Single-Premium Deferred and Deferred Annuities
Single-premium Deferred Annuities require one lump-sum payment to start for an agreed-upon future time period before payout. Deferred Annuities differ by their payment method which is in monthly payments. Upon retirement age, you will see payments from this investment based on interest earned.
2. Flexible-Premium Deferred Annuities
Instead of making scheduled payments, a Flexible-Premium Annuity allows you to make one initial, much lower payment to get your account started. This type of annuity allows you the flexibility to add money to your annuity account when you’re able. For those starting to invest in their retirement early, you can get a head start on investment earnings for guaranteed payment on a schedule that works for you.
3. Immediate Annuities
For folks who are looking to invest a large sum of money and want to make guaranteed returns, an immediate annuity gives you the option to draw immediate payouts. This type of annuity account will pay out over an immediate period of say, five to ten years based on the initial investment and accumulated interest.
4. Equity-Indexed Annuities
Instead of funding a deferred account that then goes into an investment period until you reach retirement age, an Equity-Indexed Annuity is more hands-on. This annuity type allows you to invest a sum of money into a market like the S&P 500 and select a variety of performance stocks. This is a performance-based investment annuity that allows you the flexibility to choose your portfolio for high-yield gains over time.
Not all annuities are created equal, which is why you need an expert to help you navigate your options. Once you’ve read through our annuity offerings, call the Christina Frey Insurance Agency at (760) 855-0674. Let’s create a stress-free retirement plan together.