What is an annuity?
An annuity is a contract between you and an insurance company, under which you make a lump-sum payment or series of payments. In return, the insurer agrees to make periodic payments to you beginning immediately or at some future date. Annuities typically offer tax-deferred growth of earnings and may include a death benefit that will pay your beneficiary a guaranteed minimum amount, such as your total purchase payments.
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Fast Facts
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Types of Annuities
There are two types of annuities: fixed and variable.
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Fixed Annuities
In a fixed annuity, the insurance company guarantees that you will earn a minimum rate of interest during the time that your account is growing
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Variable Annuities
In a variable annuity, your payment or payments to the insurance company are invested in one or more investment options, such as mutual funds.
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Annuities & Retirement
An annuity can be a valuable retirement tool which provides for guaranteed future income.
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Tax Benefits
Annuities grow tax deferred, meaning interest earned and investment gains realized are not taxed until you cash out.
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Annuity Rates
A fixed annuity generally provides a higher rate of return than a CD. Rates beetwen 3-10% are common.
