3 Things You Need to Know About Annuities
In this weekend’s segment of Better Money on WFSB Channel 3, Joel Johnson, CFP® and Kara Sundlun discuss the different types of annuities and how they can be used in the context of a retirement plan.
Annuities are insurance products and guarantee income for as long as you live. There are four types:
1. Fixed
This type of annuity offers protection of your principal from market losses. You get some of the upside in the good years, but you don’t lose anything in the bad years, meaning it won’t go down when the market does. It is designed to return 4 to 7%.
2. Pension
A Pension Annuity, or an Immediate Annuity, is bought by someone wishing to turn their pension into a form of income that will last the remainder of their life. There is an option to increase these payments each year to keep up with inflation, but it’s worth noting that doing this will result in a lower starting income.
3. Indexed
An Indexed Annuity is a form of a Fixed Annuity, and its payouts are tied to stock indexes such as the S&P 500 and DJIA; this annuity’s performance depends on how the index is performing.
4. Variable
This annuity comes with high fees and is subject to high market risk. The payout may be low or high based on how the assets are performing.
Information presented in our podcasts is considered current as of the created date. Over time, some information presented may become stale. We recommend you consult with your Financial Professional before making any changes based on information contained here.
Johnson Brunetti is a marketing name for the businesses of JB Capital and JN Financial.
Investment Advisory Services offered through JB Capital, LLC. Insurance Products offered through JN Financial, LLC.
The guarantees provided by any type of insurance contract are based on the claims-paying ability of the insurance company.
Related Resources
-
Today’s Retirement Reality
Almost one-third of Americans lack confidence that they will have enough income to cover basic monthly expenses throughout retirement. As the economic landscape continues to shift, more individual… -
How to Prepare for Taxes in Retirement
No matter how well you’ve saved for retirement, taxes are an unavoidable part of the process. The good news is that with the proper tax planning, you can minimize this burden and keep more of what… -
What Are Some Unexpected Retirement Expenses to Look Out For?
Today’s question is one we help our clients navigate all the time: What expenses might I be responsible for as I enter retirement? Nicholas J. Colantuono, CFP® joins this week’s Money Wisdom Qu… -
Essential Steps for a Robust Estate Plan
When planning for retirement, one crucial element that often gets overlooked is estate planning. Creating an estate plan can ensure that your assets, legacy, and loved ones are protected. While es… -
How Can I Generate Low-Tax or Tax-Free Retirement Income?
Today’s question is: What steps can I take to generate low-tax or tax-free income in retirement? First and foremost, it’s essential to have a tax plan – one that fits within the context of your… -
Will I Have Enough Income to Retire?
Once you’ve reached the retirement mountaintop, you may be uncertain about how to navigate the descent. Have you saved enough? Will your money last as long as you do? If you’re like most of the pe… -
Preparing for Retirement? Have a Plan for Taxes
Effective tax planning requires a proactive approach for today’s pre-retirees, as neglecting this crucial step can result in a significant tax bill later on. To help minimize your overall tax burd… -
Answers to Key Social Security Questions
The decisions you make about Social Security can have lasting implications, which is why it’s important to get your questions answered sooner rather than later. If you’re unsure about how to maxim… -
The Right Order to Build Your Financial House
You wouldn’t design a house that leaves you exposed to outside elements, so why do the same when building your financial house? A well-constructed house first and foremost needs a strong foundatio… -
Identity Theft: What to Do If Your Identity Is Stolen
In the digital age, the threat of identity theft is at an all-time high. Sophisticated cybercrime tactics and schemes have left us more vulnerable to online scams than ever before. So, what can…
