A Brief Explanation of Annuities

When planning for retirement, many people worry about running out of money. An annuity is one financial tool designed to address that concern.

How annuities work

You either pay a lump sum up front or contribute over time. In exchange, the insurance company promises income either right away (immediate) or at a future date (deferred).

Types of annuities

1. 1Immediate — payments start almost right after purchase; popular with retirees who want predictable income.
2. 2Deferred — money grows tax-deferred until payouts begin; useful for long-term planning.
3. 3Fixed — guaranteed interest and steady payments; low risk, lower return.
4. 4Variable — invested in sub-accounts; payments rise and fall with performance.

Annuities aren't right for everyone — fees, surrender periods, and tax treatment all matter. We're glad to talk through whether one fits your retirement plan.