Annuities are contracts that provide a stream of income in a financial emergency. Annuities can be purchased as standalone insurance policies or as part of a larger insurance package. They are a primary type of insurance used to protect the long-term value of a retirement portfolio and grow your money. Annuities come in a variety of shapes and sizes.
In a fixed annuity, the insurance company pays a fixed amount of money to the annuitant at a specified time for a minimum interest rate. You can choose to receive a fixed annuity for a defined period or until the money runs out.
A variable annuity allows you to choose the investment strategy for your annuity. You can choose to invest in stocks, bonds, or mutual funds. The investment strategy you choose will affect the rate of return you receive.
An indexed annuity combines insurance and investment in one product. Instead of choosing what to invest in, you choose an index to track. The insurance pays you based on the performance of the index.
Rolling over a 401k into an annuity can either take funds from your retirement account to pay for the annuity, or you can use a qualifying withdrawal from your 401k. You must have changed jobs or retired within 60 days to make the withdrawal.
A deferred income annuity allows you to accumulate money in your annuity and pay it out at a later date. This type of annuity is especially popular for future retirement funds.
This type of annuity is designed for beginning paying you right away or within a year after the annuity is purchased. Large, lump-sum payments fund these.
An MYGA is a type of annuity that guarantees you a fixed interest rate for a period of time. It is a good option for those close to retirement who prefer a guaranteed rate of return.
The Schultz Agency is here to help Washington residents plan for their future with annuities.
