An annuity is essentially an insurance product. With deferred annuities, the contract holder can accumulate money over a period of years (the “accumulation phase”) by either making an initial deposit and watching it grow, or by making periodic deposits over time. Funds invested in retirement annuities grow tax-deferred. When you’re ready to start drawing on your annuity, you “annuitize” the contract and turn it into an income stream so you receive a series of regular payments each month, quarter or year.
Best of all, retirement protection annuities can give you peace of mind without worrying about how you’ll meet your monthly expenses. Many of today’s Annuities offer Riders that will allow you to choose receiving payments for life.
Another valuable feature offered by some Annuity products is that your payment stream will be doubled in the event that you become impaired and the account value is greater than zero.
There are many reasons for choosing retirement protection annuities.
The most common reason for using annuities is to turn your savings into a regular income stream during retirement. Funds from Social Security and pensions may not be enough to allow you to live the lifestyle you want when you retire. Choosing a retirement protection annuity can give you an additional paycheck every month to supplement those other income sources. This can give you the funds you need to meet your living expenses, travel, buy gifts for loved ones and more.