What is an Annuity?

An annuity is a contract with an insurance company that allows you to receive a series of payments on a set schedule. There are a few different types of annuities, that come with different features. A fixed indexed annuity, or FIA, might have the potential to be a key part of your retirement strategy. What is an annuity? Is it a viable option for you? Innovative Investment Professionals can help you find out.

Some types of annuities may be able to provide you with a guaranteed* income source in retirement, with reasonable rates of return** over time. In the event of a stock market drop, the money in your annuity will be protected. 

Annuities in Retirement

Annuity Myths

There are a few myths and misconceptions about what an annuity is. Some agents will tell you annuities are bad. Well, for one thing, not all annuities are the same. There are different types: Some invest your money directly into the stock market. A fixed indexed annuity, however, doesn’t. An FIA comes with a guarantee* of safety.

Annuities Then Vs Now

Your options were limited when it came to annuities in the past. Some of these products offered protection of principal, but had low return rates. Others came with potentially higher returns, but at the cost of your money being at risk. Thankfully, the landscape has changed in the past decade or so. You no longer have to choose between these two benefits. Both guaranteed* safety and reasonable rates of return** can be achieved in one product.

Some annuity products come with additional benefits. For example, different tax rules apply to them compared to other, more traditional retirement options. And, an annuity has no contribution limit. This might make it very useful to you if you’ve exhausted your other accounts. Contact us to learn more.

Red Line Vs Green Line

The stock market (that’s the red line) frequently takes ups and downs. This is its nature. An annuity (the green line) earns interest based on the market, however, it doesn’t decline in value when the market does. What is an annuity? Can it help you achieve your long-term financial goals? We can help you find out. Reach out to us to learn more.

Happy adults celebrating an event with wine while discussing annuities for retirement
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