Check out this video to learn the four different types of annuities!
So, what exactly are annuities and why are they so special?
Here at Tony Walker Financial, we are well versed in the various kinds of annuity offerings and excited to better educate Savers on the four most common product types!
First is the Variable Annuity. This annuity is not one used often by Savers. This is an annuity that is invested in the stock market AND still leaves your money exposed to market risk. These annuities may include income riders for Mailbox Money®, but often with a high fee attached. If you’re considering a variable annuity – beware of fees and surrender periods.
The second type of annuity we are very fond of is the Fixed Interest Annuity. These annuities are very similar to certificate of deposits (bank CDs). The current rates on these annuities varies between 3.35- 4% (July 2022) depending on the surrender period. If you’re considering a Fixed Annuity – consider the company’s AM Best Rating and be sure the advertised interest rate is for the full term of the contract and not just year one or two.
Third is the Fixed Index Annuity. This annuity will protect the Saver from the rise and fall of the stock market. It actually does this with its ability to “participate” in the stock market without the risk. This means, when the stock market falls… you don’t! That is the beauty of the fixed indexed annuity. Your annuity contract will allow you to select index crediting methods which over the course of the anniversary year may go up with the stock market, thus crediting your annuity contract value with interest. Fixed Index Annuities can have income riders which generate what we like to call Mailbox Money® – Lifetime Income you cannot outlive. Consider the way folks with pensions used to live. As I call it – Granddad’s Retirement®. He had his Mailbox Money® which consisted of his employer pension and Social Security. He didn’t have to worry about the stock market. He know he had guaranteed income as long as he lived! This type of annuity can be very complex, so be sure when considering an indexed annuity, you’re considering it as part of a written GamePlan from a Retirement Planning Specialist.
Last, but not least, is the Immediate Annuity. This annuity can be compared to a traditional pension plan. They have very similar functions – lifetime income under certain conditions. These are used in some planning scenarios, but ensure you consider all options before selecting an immediate annuity due to the fact that when you die, your beneficiaries may be left with nothing.
Again, when considering all annuity options, it is important to have an advisor who will be on your side for your retirement planning experience. Here at Tony Walker Financial, we are happy to educate you on your options in the wonderful world of annuities.
Click this link below to download Annuities Made Easy!