Income During Retirement
Annuities can be purchased to provide an income during retirement, and they may be sold in exchange for the immediate payment of a lump sum (single-payment annuity) or a series of regular payments (flexible payment annuity), prior to the onset of the annuity.
Fixed annuities are insurance products that protect against loss and generally offer fixed rates of return. The rates are typically based on the current interest rate environment.
Indexed annuities are a type of tax-deferred financial product whose credited interest is linked to an equity index—typically the S&P 500 or international index. It guarantees a minimum interest rate if held to the end of the surrender term and protects against a loss of principal.
Deferred annuities can be purchased for growth of principle, which provides an income stream, but can also provide long-term care benefits, and provide a variety of creative ways to leave behind money to loved ones.
An annuity that provides for payments for the remainder of a person’s lifetime is a life annuity.