Annuities are insurance policies that provide you with regular payments immediately or at a certain time in the future. You may purchase an annuity to contribute to the growth or protection of your retirement savings or to provide you with a guaranteed income.
There are many different types of annuities. Each type has unique characteristics that can help you reach your financial goals, whether you are saving for retirement, nearing retirement or living in retirement. Here are some types of annuities to consider:
Tax-deferred annuities
You can use this type of annuity to increase your retirement savings. With a tax-deferred investment, earnings compound over time, providing growth opportunities that taxable accounts lack. With deferred annuities, there is no limit on IRS contributions, so you can invest as much as you want for retirement.
Deferred variable annuities
Deferred variable annuities include funds that can offer investment growth potential. However, this type of annuity is usually for those not close to retirement and therefore, can handle market fluctuations.
Deferred variable annuity with a guaranteed minimum accumulation benefit
This type of annuity guarantees that if your account value at the end of at minimum a 10-year holding period is less than the amount you had initially invested, the issuing company will add an amount that covers any losses to restore the full amount (less the impact of withdrawals and partial amortization).
Deferred fixed annuities
Deferred fixed annuities offer a guaranteed rate of return for a specific number of years. They are more suitable for conservative investors or for those interested in protecting assets from market volatility.
Immediate Annuity
When you buy an immediate annuity, you have a guaranteed income for the rest of your life and you receive payments immediately. This kind of annuity, based on an individual’s age and life expectancy, is more for those who are retired or near retirement. There are no limitations, unlike 401(k) plans or IRAs and SEPs, on how much you can contribute. The greater your contribution, the higher your guaranteed income.
The Shapiro Financial Planning Group has highly experienced annuity specialists who can answer your questions and provide you with information about other types of annuities that may be best for your situation. So, please contact us to schedule an appointment.
516-338-8700 ext. 1236
