Annuities

Insurance annuities give you a steady stream of income, whether for a set number of years or for life. These products, offered by insurance companies, work as both insurance and investment tools. At Jimmy Piper LLC, we help people in our community make sense of annuities and how they fit into a solid retirement plan.

What Are Annuities?

An annuity is a contract with an insurance company. You pay a lump sum or make regular payments, and in return, the insurer sends you regular payments. These payments can start right away or at a future date, depending on your needs.

How Annuities Work

Every annuity has two main phases:

1. Accumulation Phase: This is when you put money into the annuity, either all at once or over time.
2. Distribution/Annuitization Phase: This is when you start getting payments from the annuity.

Main Types of Annuities

1. Fixed Annuities: These offer steady, guaranteed payments based on a set interest rate.
2. Variable Annuities: Payments change based on how your chosen investments perform.
3. Indexed Annuities: Returns are linked to a market index, like the S&P 500, with some protection against market drops.
4. Immediate Annuities: Payments start right after your first investment.
5. Deferred Annuities: Payments begin later, giving your money time to grow tax-deferred.

Payout Options

• Lifetime payments: Payments last as long as you live.
• Period certain: Payments continue for a set number of years.
• Joint and survivor: Payments keep going until both you and another person, usually a spouse, pass away.

Key Benefits of Annuities

• Steady income, especially with fixed annuities
• Tax-deferred growth until you take money out
• No limits on how much you can put in, unlike IRAs or 401(k)s
• Optional death benefits for your loved ones

Potential Drawbacks

• Fees can be higher than with other investments
• Less access to your money, with possible charges for early withdrawals
• Contracts can be hard to understand
• Tax penalties may apply if you take money out before age 59½

Annuities can play a strong role in retirement planning for those who want steady income. We always look at your full financial picture, your goals, and your comfort with risk before making a plan.

At Jimmy Piper LLC, we walk you through your annuity choices and help you build a plan that fits your retirement needs. We’re here to help you feel confident about your future.

Call us at 318-730-5868 or click here to get your free quote.

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