Annuities

An annuity is a contract where you make an upfront payment to an insurance company in exchange for a guaranteed stream of income during retirement. Annuities can help provide a stable income in retirement, ensuring that you don’t outlive your savings. The money you invest in an annuity grows tax-deferred, which means you won’t pay taxes on the interest until you start receiving income. This can significantly reduce your tax burden during your working years, leaving you with more money for other investments or expenses.

There are different types of annuities, including fixed and variable options. A fixed annuity provides a guaranteed return, and your principal is protected from market losses, but the returns are capped. A variable annuity, on the other hand, allows your investment to grow based on market performance, offering the potential for higher returns, but also more risk. Both types provide essential financial security, but the right option depends on your risk tolerance and retirement goals.