Annuity Income

An FIA holds you and an insurance company in a contract together. You contribute money and the insurance company agrees to certain terms. For example, one benefit could be a lifetime income. You could choose to have that income begin after several years. Or, you may decide to not take payments until the annuity has potentially grown. There are positives for some retirees in using an FIA as part of their retirement plan. This protection piece is often a valuable benefit for many in retirement.

FIAs do not drop below your principal balance, even if the stock market does. Because insurance companies do not link your FIA directly to the market, you don’t have this risk. However, the insurance company may also have options of a minimum interest rate for you. Basically, the insurance company takes the risk and therefore, your interest may be lower than the stock market. On the plus side, you don’t have to bear the risk of the market with an FIA. For some clients, a balance of proper protection, as well as some risk, might be the solution. We believe in building a foundation first. An FIA may be a piece of that foundation for some retirees.

Some financial vehicles carry built-in risk. Certainly, some investments are riskier than others. With an FIA, your income may payout to you for your entire lifetime. Just think about how many retirement years you may have ahead of you. More and more people are living well into their 90’s. And, with new and healthier lifestyles, more people are living past 100 years old as well. Because of this, some retirees worry about their money lasting throughout their lifetime. An FIA may be an option to consider if you want to secure your principal. A flow of income for the rest of your life may be appealing to some people. And, with so many options to choose from, there may be an FIA type that works for you.