Annuities

What is an annuity?

With a fixed annuity, the carrier credits a set interest rate for a period. With a fixed indexed annuity, the credit is tied to a market index within a cap and a floor, so the value isn't reduced by a falling index. Both grow tax-deferred: taxes are due when money comes out, not while it grows.

Annuities are long-term contracts. Most charge a surrender fee if you take out more than a set amount in the early years, and withdrawals before age 59½ may also face a federal tax penalty. We go through those terms with you before you sign, and suggest talking with a tax professional about your own situation.

Who annuities are for

• People nearing or in retirement who want part of their savings to become income.
• Savers who want growth without the ups and downs of the market.
• Anyone moving a 401(k) or IRA who wants a predictable option.
• People worried about outliving their savings.

What it helps cover

An annuity can provide income alongside Social Security and a pension, cover the essentials each month, or hold money that grows tax-deferred until you need it. Many contracts also pass any remaining value to your beneficiaries.

Why work with an independent agency

Rates, caps, surrender periods and income options differ between carriers and change often. We compare the annuities available to you, explain the surrender schedule and the fees in plain words, and recommend one only if it fits the rest of your plan. The carrier issues the contract.