Reasons to Purchase Annuities

Annuities are financial products designed to provide a steady income stream, often used in retirement planning. While they are not right for everyone, annuities offer unique benefits that help many individuals secure financial stability and predictable income as part of a long-term financial strategy.

Guaranteed Lifetime Income

One of the primary reasons people purchase annuities is for guaranteed lifetime income. Unlike many investments that fluctuate with the market, certain annuities ensure you receive consistent payments for life, helping protect against the risk of outliving your savings.

Tax-Deferred Growth

Annuities allow earnings on your premiums to grow tax-deferred until you begin withdrawals. This means you do not pay taxes on the interest or gains each year, which can accelerate growth and improve long-term income potential.

Customizable Income Options

Annuities can be structured in different ways to fit your needs, such as:

• Lifetime income

• Payments for a fixed period

• Joint income for spouses or partners

• Guaranteed minimum payment amounts

This flexibility helps you tailor income to match your financial goals.

Protection From Market Volatility

Certain annuity types, like fixed annuities, provide predictable returns not directly tied to market performance. For individuals seeking stability and protection from market downturns, these annuities offer a layer of financial security that traditional investments may not provide.

Planning for Retirement Expenses

Annuities help with planning for retirement by providing a predictable source of income that can supplement Social Security, pensions, and other retirement assets. This makes budgeting for recurring expenses more manageable over the long term.

Estate Planning and Death Benefits

Some annuities include death benefit features that provide a payout to beneficiaries if you pass away before payments begin or during the payout phase. This can add an element of financial protection for loved ones.

Reducing Longevity Risk

Longevity risk is the risk of outliving your savings. Annuities that guarantee income for life help mitigate this concern by ensuring you have a steady stream of funds regardless of how long you live.

Frequently Asked Questions

What are annuities?
Annuities are financial contracts that provide periodic income payments, often used for retirement income planning.

Why purchase an annuity instead of traditional investments?
Annuities can offer guaranteed income, protection from market swings, and tax-deferred growth that traditional investments may not provide.

Do annuities provide lifetime income?
Certain types of annuities guarantee lifetime payments that continue for as long as you live.

Can annuities grow tax-deferred?
Yes. Earnings on an annuity contract grow tax-deferred until withdrawals begin.

Can beneficiaries receive death benefits?
Some annuities include death benefit provisions that provide payouts to beneficiaries.

Are annuities suitable for everyone?
Annuities are beneficial for many people seeking income stability, but suitability depends on individual financial goals and risk tolerance.

Final

Purchasing an annuity can provide steady income, tax advantages, protection from market volatility, and peace of mind as part of a broader retirement strategy. With over 30 years of experience, we help individuals evaluate their financial goals and determine whether annuities align with their long-term needs.

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