An annuity is a contract between you and an issuer where you agree to give the issuer principal and in return the issuer guarantees you fixed or variable payments over time.
An annuity is similar to a retirement plan in that you can fund it in a lump sum or a little at a time. Unlike retirement plans, however, there is no limit as to how much you can invest in annuities!
The large number of annuity products on the market today can make selecting the most suitable annuity a confusing process. But in fact, there are only a handful of different types of annuities.
Annuities generally fall into two categories: deferred and income.
Tax-deferred annuities: for retirement savings
Deferred annuities can be a good way to boost your retirement savings. Like any tax-deferred investment, earnings compound over time, providing growth opportunities that taxable accounts lack.
Income annuities: for income in retirement
Income annuities may be appropriate for investors in or near retirement because they offer guaranteed3 income for life or a set period of time.
To learn more about annuities, contact one of our experts today.