Learning about...

ANNUITY BENEFITS

Could an annuity be right for you? One way to find out this is to review annuity benefits. Then, compare those benefits to your current retirement accounts. Finally, consider what your future financial goals are. For example, how much do you currently have in assets? How much of this money would you like to keep secure versus risk in the market? You’ll also want to examine how these needs may change in the future.


One of the main benefits of annuities is that they protect your principal. No matter what is going on in the stock market, an annuity keeps your money safe. Also, specific types of annuities, such as some fixed indexed annuities (FIAs) provide a reasonable rate of return. So, in addition to protection, you can have some potential growth as well. Retirees often use an annuity to get a lifetime income as well. Annuity benefits could also include items such as income riders. These benefits allow you to increase your income from your annuity over time.

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Learning About Annuity Benefits

One of the best actions you can take to help your financial future is to learn more. Get educated about your retirement options. Then, you can evaluate your own risk tolerance, and the different choices you have. Your money should work for you. So, take the time to learn how to help that happen. For example, fixed annuities and FIAs protect your principal from market loss. But, there are various other choices within these products. Attend one of our educational dinner seminars or online events to learn more.

Insurance Company Benefits

FIAs and fixed index annuities re products offered through an insurance company. You put money into an account with the company (usually a minimum of $20,000). Next, the insurance company attempts to grow this money over a certain period of time. This stage usually lasts about 5-10 years, but could be longer if you choose. Once this first holding period is over, you are then allowed to start taking income from your annuity.


Because your money is protected by an insurance company, an FIA has some security. In fact, the insurance company must have reserves to cover its claims. Therefore, the protection of your money is due to the insurance company’s stability. The benefit, of course, is your money is safe from market dips.

Keeping Money Safe

The value of an FIA does not drop if the market does. However, you may have indexed interest potential. Your FIA links with a market index. If that index goes up, your FIA will capture some of the growth. If that index goes down, however, you don’t lose. In addition, some annuities also offer a set interest rate on your money. No matter how things are going in the stock market, FIA owners know their principal is safe.

A Lifetime Income

Many people use FIAs and other annuities to provide an income for life. Similar to a pension, you can set a dollar amount of income to receive each month from your annuity. Of course people are often living longer these days. It is not uncommon now for people to live well into their 90’s or even past 100. Because of this, you’ll need to plan your money to last a long time. If you worry bout making your money last, take a look at FIAs. These products could help with securing an income that lasts your whole life.

What About Return?

Your rate of return on an annuity will vary, due to a few factors. First, various products offer certain benefits and options. Also, the company that offers the annuity may have different terms of their contracts. At Orfin & Associates, we help you review your potential interest rate choices and retirement options. Annuity benefits may include a reasonable rate of return. Remember, the issuing insurance company protects your principal. Keep your money safe, yet expect returns that are reasonable. That’s the possible benefit of an annuity.

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