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Annuities
Retirement income you can't outlive
An annuity is a contract with an insurance company: you hand over money now, they pay it back later on agreed terms. That's the whole idea. The details are where it matters.
The kinds we place
Guaranteed rate, set term
Fixed annuity / MYGA
A multi-year guaranteed annuity pays a fixed interest rate for a set number of years — often three to ten. Closest thing in the insurance world to a certificate of deposit, usually at a better rate.
Where it's strong
- Rate is guaranteed and known before you commit
- No market exposure at all
- Growth is tax-deferred until you withdraw
- Simple enough to explain in two sentences
What to watch
- Surrender charges if you withdraw early
- Rate is fixed, so inflation is your risk
- Withdrawals before 59½ may face a tax penalty
Index-linked, with a floor
Fixed indexed annuity
Interest is credited based on a market index, subject to a cap or participation rate. In a year the index falls, you are credited zero rather than a loss.
Where it's strong
- You cannot lose principal to a market drop
- More upside than a fixed rate in strong years
- Optional riders can guarantee lifetime income
- Tax-deferred growth
What to watch
- Caps and participation rates limit your gains — you won't match the index
- Income riders carry an annual fee
- Surrender periods are often long, sometimes ten years
- The crediting method matters enormously. Ask exactly how it's calculated.
Income starting now
Immediate annuity (SPIA)
A single premium converts into income beginning almost immediately, for a set number of years or for the rest of your life.
Where it's strong
- Turns a lump sum into a predictable paycheque
- Lifetime option pays no matter how long you live
- No ongoing decisions to make
What to watch
- Generally irreversible — the money is committed
- Life-only options may leave nothing to heirs; period-certain options address that
- Inflation erodes a fixed payment unless you add a rider
Income starting later
Deferred income annuity
You buy now and income begins at a future date you choose. Because payments start later, each dollar buys more income than an immediate annuity would.
Where it's strong
- Efficient way to guarantee income later in retirement
- Hedges the risk of living a very long time
- Smaller premium for the same eventual income
What to watch
- Money is committed well before you see anything back
- Limited access during the deferral period
- Same inflation caveat applies
Where annuities go wrong.
Almost always the same way: someone put money in that they needed sooner than the surrender period allowed. An annuity is a long-term commitment. Emergency savings, next year's roof, and anything you might need quickly belong somewhere else.
Ask three questions before signing anything: how long is the surrender period, what does it cost me to get out in year two, and how much can I withdraw each year without a penalty.
On variable annuities.
Variable annuities invest directly in market subaccounts and can lose principal. Selling them requires FINRA securities registration in addition to a state insurance licence. We are not securities registered and do not offer variable annuities or variable life products.
Everything on this page — fixed, multi-year guaranteed, indexed, immediate and deferred income annuities — is a fixed insurance product and needs no securities registration. If a variable product is genuinely the better fit for your situation, we will say so and point you to someone registered to sell one.
Is an annuity even right for you?
Often the honest answer is no. Annuities make sense when you have money you genuinely will not need for years, you already have accessible savings, and predictable income matters more to you than maximum growth.
They make poor sense when the money is your only reserve, when you're likely to need it soon, or when someone is presenting one as a way to "beat the market." That's not what they do.
Guarantees in any annuity depend entirely on the claims-paying ability of the issuing carrier. That is a real consideration, and one reason we pay attention to which company a contract is written with.
Not sure which of these you need?
That's the normal starting point. Call and we'll work through it in about ten minutes — no obligation, and an honest answer if the right move is doing nothing at all.
888-343-4002Toll free — Monday to Friday, 9am – 6pm ET