Fixed Annuities
In your overall retirement plan, a fixed annuity can play a valuable role by helping you accumulate tax-deferred earnings. Annuities provide the opportunity for lifetime payments, tax-deferred growth, and a guaranteed death benefit for your beneficiaries. It’s important to note that all guarantees are supported by the continued claims-paying ability of the issuing insurance company.
There are several factors to consider when deciding to invest in an annuity as part of your long-term financial strategy. If you find yourself in a higher tax bracket and wish to defer additional income, an annuity can be a suitable option. Additionally, if you have already reached the deductible limit on your other retirement accounts and desire to save more for retirement, an annuity can serve as an effective tool.
It’s crucial to understand that an annuity differs from other retirement savings vehicles as it is essentially a contract between you and an insurance company. By making one or more premium payments, the insurance company agrees to provide you with an income stream, typically during your retirement years. You have the flexibility to choose whether to receive payments in a lump sum or as a series of payments, potentially spanning the duration of your lifetime.