Annuities are guaranteed streams of income – now or in the future. If you are searching for income stability and guarantees, we can search the annuity market to find the payment level or conservative growth rate you need. None of the annuity options we offer place your investment principal at risk due to market losses. We offer “fixed” annuities (not “variable”), that either provide an immediate income stream for a period of time, or a deferred annuity with the option for withdrawals at a later date.
We strongly feel that if an annuity is a part of your financial plan, the amount devoted to this strategy should only be a portion of your total investable assets. This is primarily because of the need for diversifying your investment strategies, but also because deferred annuities typically come with restrictions on withdrawals for a period of time, depending on the type of annuity policy you own. Though, during this period, you will normally have access to at least 10% of the account value, or the interest earned each year.
Immediate annuities commence with regular, guaranteed payment amounts right from the get-go. For example, you can contribute after-tax money or rollover qualified retirement money to an insurance company, and request a guaranteed income stream for a certain period. It could be anywhere from 5-25 years, or even for the rest of your life. The correct payout option is based on each individual’s situation, and is especially important when a spouse is involved.
Deferred annuities do not immediately pay out a regular stream of income, rather they grow each year based on the annuity policy’s current year growth rate. Some deferred annuities grow at a guaranteed rate for a specific number of years, while others will pay different rates each year, based on the interest rate environment at the time of the policy’s annual anniversary date. If withdrawals are needed, this can be done at any time, though the withdrawal amount may be limited during a certain number of years, as mentioned above. It’s important to take this into account before investing in an annuity.
If you want to avoid withdrawal restrictions and would prefer to turn your deferred annuity into an immediate annuity, you just need to request that the insurance carrier begin the payments, based on the payout option you feel is appropriate. As an independent insurance broker, Fiduciary Insurance Group is available to help you determine the right payout option when the time is right.