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What is an annuity?

A Pension Plan is an annuity, a lottery winner gets an annuity. So, what is an Annuity? An annuity is a contract between you and an insurance company. You may buy an annuity to get many valuable benefits, including the potential for a guaranteed stream of income in retirement – in some cases for as long as you live. An annuity may help you avoid outliving your retirement savings. Think of it as part of your plan for lifetime income.

Annuities offer a variety of benefits:

  • Tax deferral
  • Income in retirement – for a specific period of time or the rest of your life, if you choose
  • Protection from loss
  • The ability to transfer wealth to your heirs and avoid probate
  • Can be customized with extra features, or riders, available for additional costs, that can help provide:                                     
    • - Guaranteed lifetime income
    • - Enhanced death benefit

An annuity is a good choice if you want:

  • A source of regular income in retirement that you cannot outlive
  • Assisted Living and Long-Term-Care benefits
  • The ability to reduce the impact inflation could have on your standard of living
  • Tax-deferred growth of your retirement savings
  • A way to transfer some wealth to your heirs, while avoiding the costs and delays of the probate process

Different types of annuities do different things:

FIXED ANNUITIES

Provide steady, or fixed, interest for a specified period of time

FIXED INDEX ANNUITIES/ HYBRID ANNUITIES

Money can grow interest based on several market indexes, but without actually participating in the market,
so you get more upside potential without downside risk!

VARIABLE ANNUITIES (not recommended)

Koch Insurance Brokers, LLC
            336 Anvil Dr. | Douglassville, PA 19518 | Ph. 610.370.7268

 

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Information presented is believed to be current. All expressions of opinion reflect the judgment of the authors on the date of publication and may change in response to market conditions. All investments have the potential for profit or loss. Different types of investments involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio.