Broker Check

3 Myths About Annuities You Need to Know

| May 29, 2019

When it comes to investment types, annuities are often misunderstood. Annuities can play an important role in your retirement plan because it’s not just about saving, it’s also about generating a steady stream of income so you can retire comfortably.

Are annuities right for you? Here are three debunked myths that may help you with your decision:

  1. All annuities are the same. Annuities come in many forms and options. They’re divided into two general categories based on when income distributions are scheduled to begin:
    1. Deferred annuities –With a lump sum payment or a series of premium payments, you defer the payout by having your money invested for a period of time until you’re ready to take withdrawals (typically in retirement).
    2. Immediate annuities –With a lump sum payment upfront, your income stream begins right away (no accumulation period) and continues for the remainder of your life or for a specified period of time.
  2. Annuities are expensive. While there are fees associated with annuities, it doesn’t mean all annuities are expensive. Keep in mind that the fees can vary depending on the services and features it offers. You’ll want a full understanding of the type of annuity you’re considering and then weigh it against your other options.
  3. The insurance company will keep all my money when I die. In the event of your death, there are annuities that offer the option to have your income payments or account value passed onto your beneficiaries.

As your dedicated team, we’re here to educate and guide you through life’s transitions and the difficult decisions that come with them. Contact us to learn more about how annuities can fit in your retirement plan.

The content within this document is for informational and educational purposes only and does not constitute legal or tax advice. Customers should consult a legal or tax professional regarding their own situation. This document is not an offer to purchase, sell, replace, or exchange any product. Insurance products and any related guarantees are backed by the claims paying ability of an insurance company. Insurance policy applications are vetted through an underwriting process set forth by the issuing insurance company. Some applications may not be accepted based upon adverse underwriting results.