Annuities & Retirement Income
You have spent years building your retirement savings. Now you may be wondering how to protect a portion of that money and use it to help support the retirement you want.
An annuity can help give part of your savings a specific purpose, whether that is earning predictable interest or providing income for the years ahead. It is a contract with an insurance company, and the benefits depend on the annuity you choose.
At Senior Insurance & Retirement Advisors, we focus on fixed annuities, fixed indexed annuities, and multi-year guaranteed annuities, or MYGAs. We can help you understand how each works and whether one could complement your Social Security, pension, or other retirement resources.
If you like the idea of growth potential with protection from stock market declines, a fixed indexed annuity is worth a closer look.
You may want part of your retirement savings to have an opportunity to grow without losing value because a market index falls. A fixed indexed annuity, often called an FIA, is designed with that goal in mind.
An FIA can earn interest linked to the performance of a market index. You do not buy stocks or invest directly in that index. The insurance company calculates interest using the rules in your contract.
When the index rises, you may earn interest, subject to those rules. When the index falls, the indexed interest credit will not be negative, although it may be zero. This protects against losses caused by an index decline; withdrawals, contract charges, and adjustments can still reduce the amount available to you.
Some FIAs also offer an optional income feature that can provide payments for life, subject to its terms and any additional cost. This may help supplement Social Security or a pension.
For someone who values protection and wants to plan for future income, that combination makes an FIA a useful option to explore.
The main difference is how interest is earned. Here is a simple way to understand the options we offer.
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Fixed Indexed Annuities
An FIA offers interest potential linked to a market index, with protection against negative indexed interest credits. The amount credited is limited by the contract, so it will differ from the index’s full return. It may appeal to people who want growth potential for part of their savings without direct exposure to stock market losses.
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Traditional Fixed Rate Annuities
​A traditional fixed rate annuity earns interest at a rate declared by the insurance company for a specified period. The rate may change when that period ends, subject to the contract’s guaranteed minimum. It may appeal to people who prefer predictable interest over index-linked interest.
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MYGAs
A multi-year guaranteed annuity is a fixed rate annuity that locks in an interest rate for a set number of years. It may appeal to people who want to know their rate in advance. Like a bank CD, it has a defined rate period, but a MYGA is an insurance contract with different withdrawal rules and tax treatment. It is not FDIC insured.
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An annuity works best when its purpose and time frame match your needs. We start with what you want this money to do and how much access you may need along the way.
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Access to your money. Annuities are generally designed for longer-term goals. Some withdrawals may be allowed without surrender charges, but amounts and timing vary. Larger or early withdrawals may trigger charges or adjustments.
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How interest is earned. FIA interest is not guaranteed every year. Contract limits affect what you earn, and some limits may change at renewal.
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Income options. Lifetime income depends on the payout option or income feature selected. Optional features may carry fees, and withdrawals beyond permitted amounts can reduce future benefits.
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Taxes. Earnings generally grow tax-deferred until withdrawn. An annuity within an IRA adds no further tax deferral. Taxable withdrawals before age 59½ may also face a federal tax penalty, unless an exception applies.
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Your overall needs. Keep money available for emergencies and near-term spending. Inflation can also reduce what a fixed income payment buys over time. An annuity should fit alongside your other resources.
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We will explain the guarantees, costs, withdrawal rules, and income options so you can make an informed decision.
Let Us Talk About Your Retirment Income
Would you feel more comfortable knowing that part of your retirement savings had a plan for protection or future income?
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We can walk you through fixed indexed annuities, fixed-rate annuities, and MYGAs in plain English. Bring your questions and tell us what matters most to you. Together, we can explore whether an annuity fits your goals.
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Call 308-436-9314 or schedule a conversation with Senior Insurance & Retirement Advisors.
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Important information
Annuity guarantees depend on the financial strength and claims-paying ability of the issuing insurance company. Annuities are not bank deposits and are not FDIC insured. Benefits, interest-crediting rules, fees, surrender charges, and any market value adjustments vary by contract. Protection against negative indexed interest does not eliminate all risks or guarantee that your cash value can never decrease. This information is general education; individual recommendations depend on your circumstances.