Principal protection, tax-deferred growth, and income you cannot outlive, shopped across top-rated carriers in all 27 states I am licensed in. Find your state below.
Annuities are contracts between you and an insurance company. You hand over money, either in one lump sum or over time, and in return the company protects your principal, grows it on a tax-deferred basis, and can later convert it into a paycheck you cannot outlive. Think of an annuity as a tool for turning a pile of savings into reliable income, the same way a pension once did for an earlier generation. The growth stays sheltered from taxes until you take it out, which lets the money compound more efficiently.
There are a few common types. A fixed annuity credits a set interest rate for a defined term, similar to a bank CD but tax-deferred. A fixed indexed annuity links your interest to a market index with a floor that protects against losses and a cap or participation rate that limits the gains. Both protect your principal from market downturns. We focus on these conservative, principal-protected options rather than variable annuities, which carry market risk. For a deeper explanation, see our blog post on annuities explained: fixed, indexed, and variable.
Annuities tend to fit people at or near retirement who have saved well but worry about two things: outliving their money and losing it in a market crash right when they need it. If you are tired of watching your nest egg swing with the headlines, a principal-protected annuity can carve out a portion of your savings for guaranteed, predictable income. They also appeal to savers who have maxed out other tax-advantaged accounts and want another place for tax-deferred growth.
An annuity is not for everyone. If you need full liquidity, are far from retirement, or have not built an emergency fund yet, other tools come first. Many of our clients pair an annuity for income with life insurance for legacy. You can compare approaches in our money moves to build wealth guide or look at tax-advantaged growth inside our indexed universal life insurance page.
Fixed and fixed indexed annuities usually have no upfront sales charge that comes out of your deposit, which surprises people. Instead, the main cost to understand is the surrender period. For a set number of years, withdrawing more than the free withdrawal amount triggers a surrender charge that declines over time. Some indexed annuities also offer optional income riders that carry an annual fee in exchange for stronger guaranteed income. There is no quoted rate here, because rates and caps change and vary by carrier and state.
On safety, fixed and indexed annuities are designed to protect principal from market losses, and any guarantees rely on the claims-paying ability of the issuing insurance company. They are not bank products and are not FDIC insured. Every state also runs a guaranty association that provides a limited backstop. You can review neutral buyer education from the National Association of Insurance Commissioners before you decide.
The process begins with a conversation about your retirement income gap, not a product pitch. We look at what you have, what you need each month, and how much you want protected. Then we shop top-rated carriers and show you the contract details in plain language, including the surrender schedule, before you sign anything. You can book a retirement income review whenever you are ready.
That is an old myth tied to certain payout choices. Most modern annuities pass any remaining value to your beneficiaries, and you choose the payout structure up front. Nothing is hidden.
High-fee variable products earned that reputation. The fixed and indexed annuities we focus on are different, with principal protection and clear terms. The IRS rules on tax-deferred growth are worth understanding, and a fair review will show you whether one fits your plan or not.
They are contracts with an insurance company. You contribute money, the company protects your principal and grows it tax-deferred, and it can later turn it into income you cannot outlive. They create predictable retirement income that does not depend on the market day to day.
Fixed and fixed indexed annuities protect principal from market losses, and guarantees are backed by the claims-paying ability of the issuing carrier. They are not bank deposits and are not FDIC insured. Each state runs a guaranty association for a limited layer of protection.
A fixed annuity credits a set rate for a term, like a CD. A fixed indexed annuity links interest to a market index with a floor against losses and a cap that limits the upside. Both protect principal.
With fixed and fixed indexed annuities your principal is protected from downturns. The main risks are surrender charges for early withdrawals and reliance on the carrier's financial strength. Variable annuities, which we do not focus on, can lose value.
Educational information only. This is not financial, tax, or legal advice. Annuities are not bank products and are not FDIC insured. Guarantees are subject to the claims-paying ability of the issuing insurance company. Features, rates, and surrender terms vary by carrier and state. Brokered through Family First Life. NPN 22121673.