TYPES OF ANNUITIES
Find out if an annuity is right for you.
A First Command Financial Advisor can explain the features of various annuities, help you determine if they are a good addition to your financial plan and, if so, help you choose one that meets your needs.
The concept of a traditional fixed annuity is simple: in exchange for a lump-sum payment, and an insurance company agrees to provide you with a guaranteed stream of income for a specified period of time. Generally, payments are made monthly for the lifetime of the annuitant or, in the case of a married couple, the lifetime of the last survivor.
The return on your investment in this type of annuity is not guaranteed or fixed, but varies based on how its underlying investments perform. There may be an opportunity for higher returns; however, more risk is involved.
Indexed annuities often include riders with guaranteed lifetime income to give clients peace of mind that they will not outlive their money. Their principal is also protected from loss while having growth opportunities that may be linked to an index such as the S&P 500.
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1. Guarantee depends on the claims-paying ability of the issuing insurance company.
2. As with an IRA, you generally can't withdraw money from an annuity prior to age 59½, without incurring tax penalties.