ANNUITIES
An annuity is a financial product typically sold by insurance companies that provides a stream of income, often for retirement. You invest a lump sum or series of payments, and in return, the annuity pays you income either immediately or at a future date.
Main Types of Annuities:
Fixed Annuities:
Provide guaranteed payouts with a fixed interest rate.
Low risk and predictable income.
Variable Annuities:
Payouts vary based on investment performance in underlying funds.
Potential for higher returns, but with higher risk.
Indexed Annuities:
Returns are tied to a market index (e.g., S&P 500), with limits on gains and losses.
Balance of risk and return.
Immediate Annuities:
Start paying income almost immediately after a lump-sum payment.
Often used by retirees for guaranteed income.
Deferred Annuities:
Accumulate value over time and begin paying income later.
Useful for long-term retirement planning.
An annuity is a financial product typically sold by insurance companies that provides a stream of income, often for retirement. You invest a lump sum or series of payments, and in return, the annuity pays you income either immediately or at a future date.
Main Types of Annuities:
Fixed Annuities:
Provide guaranteed payouts with a fixed interest rate.
Low risk and predictable income.
Variable Annuities:
Payouts vary based on investment performance in underlying funds.
Potential for higher returns, but with higher risk.
Indexed Annuities:
Returns are tied to a market index (e.g., S&P 500), with limits on gains and losses.
Balance of risk and return.
Immediate Annuities:
Start paying income almost immediately after a lump-sum payment.
Often used by retirees for guaranteed income.
Deferred Annuities:
Accumulate value over time and begin paying income later.
Useful for long-term retirement planning.