Annuities

Annuities represent a financial contract between an individual and an insurance company, offering a guaranteed income stream in exchange for a lump sum or periodic payments. They are often used as a retirement income strategy, ensuring a steady cash flow throughout one's retirement years.

​

One of the primary advantages of annuities is their ability to provide a reliable and predictable income, shielding individuals from the risk of outliving their savings. This aspect offers peace of mind and financial security, particularly in retirement, as annuities ensure a fixed income for life or a specified period, regardless of market fluctuations.

​

Annuities come in various forms, such as immediate annuities, where payouts start shortly after the initial investment, and deferred annuities, where payouts begin at a later date chosen by the investor. This flexibility allows individuals to tailor their annuities to match their retirement timeline and income needs.

​

They offer tax-deferred growth, meaning the funds invested in an annuity grow tax-free until withdrawals begin, potentially allowing for more significant accumulations over time.

​

Certain annuities may include features like inflation protection, beneficiary options, and even the potential for guaranteed minimum returns, providing additional layers of security and customization.

​

However, annuities may have limitations, such as reduced liquidity, as access to the funds is typically limited once the annuity is initiated. Fees and charges associated with annuities can also vary, impacting the overall returns.

​

When considering annuities, individuals should carefully evaluate their retirement goals, risk tolerance, and financial situation to determine if an annuity aligns with their needs. They can serve as a crucial part of a diversified retirement portfolio, ensuring a stable income stream during retirement and offering financial stability amidst market volatility.