Annuities are a powerful tool for guaranteed retirement income and financial stability. At Florida Retirement Group, we help retirees maximize their retirement savings and create a steady, predictable income stream using annuities.

What Is an Annuity?

An annuity is a contract with an insurance company that provides regular payments in exchange for a lump sum or series of payments. It serves as a personal pension, ensuring you don’t outlive your money in retirement.

Key Benefits of Annuities:

  • Guaranteed Lifetime Income – You receive payments for as long as you live

  • Tax-Deferred Growth – Earnings grow without being taxed until withdrawn

  • Protection from Market Volatility – Some annuities offer principal protection

  • Customizable Payout Options – Choose monthly, quarterly, or annual payments

Types of Annuities & How They Work

Fixed Annuities – Safe & Predictable Income

  • Guaranteed interest rate (like a CD)

  • No stock market risk – Ideal for conservative investors

  • Fixed income payments for a set period or for life

  • Great for retirees needing stable income

Example: You invest $100,000 in a fixed annuity with a 5% guaranteed return. You receive $5,000 per year for a set number of years or for life.

Fixed Indexed Annuities – Growth Potential with Safety

  • Earnings tied to a stock market index (e.g., S&P 500)

  • No risk of losing principal (even if the market drops)

  • Higher potential returns than fixed annuities

  • Option for lifetime income

Example: Your annuity tracks the S&P 500 index. If the market goes up 10%, you might earn 6% (capped at a limit). If the market drops 10%, you earn 0% but don’t lose money.

Variable Annuities – Higher Risk, Higher Reward

  • Investments in mutual funds for market-based growth

  • Higher potential returns, but also risk of losing money

  • Best for investors with a high-risk tolerance

  • Tax-deferred growth with flexible withdrawal options

Example: You invest $100,000 in a variable annuity. If your mutual fund investments grow 8%, your balance increases. If the market declines 10%, your balance drops.

Immediate vs. Deferred Annuities

Feature Immediate Annuity Deferred Annuity
When payments start Right away (30-60 days)  Future date (5-30 years later) 
Best for Retirees needing income now  People who want money to grow tax-deferred 
Growth No investment growth  Can grow over time 
Example You pay $200,000 now and get $1,000/month for life  You invest at 60, let it grow, and start withdrawals at 70 

How Annuities Fit into Your Retirement Plan

  • Create a Guaranteed “Paycheck” for Life – Never worry about running out of money

  • Protect Against Stock Market Losses – Great for conservative investors

  • Tax-Efficient Income Strategy – Reduce tax burdens in retirement

  • Long-Term Care Benefits – Some annuities provide nursing home coverage

Common Concerns About Annuities

  • Are annuities expensive?

  • Some annuities have fees (especially variable annuities), but fixed and indexed annuities have little to no fees.

  • What happens if I die early?
  • You can add a beneficiary option, so your remaining annuity balance goes to your heirs.
  • Can I withdraw money early?
  • Yes, but some annuities have surrender charges if withdrawn before a set period (e.g., 5-10 years).

Is an Annuity Right for You?

Annuities are great for retirees who:

  • Want guaranteed income for life

  • Are worried about outliving their savings

  • Need a low-risk investment option

  • Want tax-deferred growth

At Florida Retirement Group, we help you choose the best annuity for your goals. Would you like a free annuity consultation to see if it fits your retirement plan? Learn more about our program “Roadmap to Annuities”

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