Ryan Wheless and Spike Spengel discuss the various types of annuities and how best to use them in your portfolio.
This episode is designed to help you determine if one of the types of annuities is right for you.
An annuity is a financial contract in which an insurance company promises to make a series of payments to a policyholder at regular intervals, either for a specified period of time or over the policyholder’s lifetime. There are many different types of annuities, each with their own set of features and benefits.
Annuities are often used as a way to save for retirement and provide a stream of income during retirement years. It can be used to protect the savings from market volatility and provide fixed income.
Please do note that the different types of annuities come with some complexities and there are certain rules that regulate how the funds within an annuity can be withdrawn and taxes that can be applied to them, so it’s important to understand the terms of the specific annuity you are considering and consult with a financial advisor before making a decision.
There are several types of annuities, including:
1. Immediate annuities: These annuities begin paying out income to the annuitant immediately after the purchase payment is made.
2. Deferred annuities: These annuities allow the annuitant to make payments over time, which are then invested and grow tax-deferred until the annuitant decides to start receiving income payments. There are two types of deferred annuities: fixed and variable.
3. Fixed annuities: These annuities provide a guaranteed rate of return on the invested funds.
4. Variable annuities: These annuities allow the annuitant to choose how their funds are invested, typically among a selection of mutual fund-like options. The rate of return on the invested funds is not guaranteed and will vary depending on the performance of the chosen investment options.
5. Equity-indexed annuities: These annuities offer a return that is based on the performance of a stock market index, such as the S&P 500, with a guaranteed minimum rate of return.
6. Single premium annuities: These annuities are funded with a single payment, rather than multiple payments over time.
7. Multi-year guaranteed annuities: These annuities guarantee a fixed rate of return for a specific number of years, after which the rate may be reset.
8. Period certain annuities: These annuities provide income payments for a guaranteed number of years, regardless of the annuitant’s lifespan.
9. Life annuities: These annuities provide income payments for the remainder of the annuitant’s life.
10. Joint and survivor annuities: These annuities provide income payments for the remainder of the annuitant’s life, with the option to continue making payments to a survivor after the annuitant’s death.
We hope the video explaining the different types of annuities will be helpful in providing an overview of the different options available to you. From fixed annuities, to variable annuities, to immediate annuities, and more, we covered the basics of all the types of annuities so you can understand the features, benefits and risks of each one.
We understand that annuities can be complex and we want to help you make an informed decision that best aligns with your financial goals.
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Topics we will be covering are Retirement and Financial Planning, Investment Selection, Retirement Income Planning, Taxes and Taxation during Retirement, Healthcare, Long Term Care, Legacy and Estate Planning, in addition to important Market and Economic changes impacting Retirement.
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