Annuities & retirement income
Retirement income you can actually plan around
An annuity is a contract with an insurance company: you provide a sum of money, and the company makes specific promises about growth, income, or both. Here's how the main types work — including the trade-offs.
The main types
Four categories cover most situations
Multi-year guaranteed annuity (MYGA)
Credits a stated interest rate for a stated term. Predictable and simple, with tax deferral on non-qualified money until you withdraw.
Often a fit for: Savers who want a known rate for a known period
Fixed indexed annuity
Interest is linked to an external index subject to caps, participation rates, or spreads, with a floor so a down index year does not credit negative interest. You are not invested in the index.
Often a fit for: People who want growth potential with principal protection from index losses
Immediate income annuity (SPIA)
Converts a lump sum into a guaranteed stream of payments that begins right away, for a set period or for life.
Often a fit for: Retirees who want to turn savings into a paycheck now
Deferred income annuity
You fund it today and choose a future date for income to begin. Waiting longer generally produces a larger payment.
Often a fit for: Pre-retirees building a future income floor
Straight talk
The trade-offs I will always put in writing
- Surrender charge schedule — exactly what it costs to access more than your free withdrawal amount, year by year.
- Liquidity limits — how much you can take out each year without a charge.
- What is guaranteed versus what is illustrated or hypothetical.
- Every annual fee, including optional income or death benefit riders.
- Caps, participation rates, and spreads on indexed products, and the carrier's ability to change them within contract limits.
- The issuing carrier's financial strength rating.
- How I am compensated on the product.
Already own an annuity? Bring it in for a second opinion.
I'll read the contract with you: where you are in the surrender schedule, what your current crediting looks like, what riders you are paying for, and whether the contract is still doing the job you bought it to do. Very often the right answer is to keep what you have — and I will tell you so.
Call 321-423-0011 for a second opinionCommon questions
Annuity FAQs
- Is an annuity the same as a CD?
- No. A CD is a bank product insured by the FDIC. An annuity is an insurance contract, and its guarantees are backed by the claims-paying ability of the issuing insurance company, not by the FDIC or any government agency.
- Can I lose money in an annuity?
- A fixed or fixed indexed annuity is designed so that a negative index year does not credit negative interest, but withdrawing more than your contract allows during the surrender period can result in surrender charges and market value adjustments that reduce your value. Fees for optional riders also reduce value over time.
- How much of my savings should go into an annuity?
- There is no universal answer, but annuity money should generally be money you do not need for near-term emergencies. Many people use annuities for a portion of their savings rather than all of it. I will always tell you when I think an annuity is not the right fit.
- How are you paid?
- The issuing insurance carrier pays the agent a commission when a contract is issued. You will not be charged a separate fee by me for a review or a recommendation, and I will disclose how I am compensated on any product we discuss.
Annuities are insurance products, not bank deposits. They are not FDIC or NCUA insured, are not obligations of or guaranteed by any bank or credit union, and all guarantees are backed solely by the claims-paying ability of the issuing insurance company. Product features, riders, and availability vary by carrier and by state and may involve surrender charges and other limitations. This material is for general educational purposes only and is not tax, legal, or investment advice.
Withdrawals of taxable amounts are subject to ordinary income tax and, if taken before age 59½, may be subject to an additional 10% federal tax. Please consult your own tax or legal professional regarding your circumstances.
Let's find out whether an annuity even makes sense for you
If it doesn't, I'll say so. If it does, you'll see the fine print before you see a signature line.