FAQ's

An annuity is a financial product you buy from an insurance company that can provide guaranteed income — either now or in the future. It’s often used for retirement and can offer growth, income, and protection from market losses.

Yes, annuities are generally safe, especially fixed and fixed indexed annuities. Your money is not invested directly in the stock market. They're backed by the financial strength of the insurance company that issues them — not FDIC-insured like a bank, but regulated and protected at the state level.

There are 3 main types:

• Fixed annuity: Pays a guaranteed interest rate.
   
• Fixed Indexed Annuity (FIA): Growth is linked to a market index, but with downside protection.
   
• Variable annuity: Invested in the market — offers higher growth potential, but with risk.
   

Each type has different features depending on your goals: growth, income, or legacy planning.

You can choose to get income:

• Immediately (with an immediate annuity)
   
• Or later (with a deferred annuity)
   

Income can be:

• For a set number of years
   
• Or for the rest of your life (or your spouse's too)
   

You can also add riders that guarantee income, even if your account runs out of money.

Not necessarily. You can choose options that allow your beneficiaries to inherit the remaining value. If you pick "life-only" income with no death benefit, payments end when you die. But most modern annuities offer death benefit riders or refund guarantees.

It depends on the type:

• Fixed and fixed indexed annuities usually have low or no annual fees (unless you add optional riders).
   
• Variable annuities tend to have higher fees (often 2–3% per year) because they’re market-based and include investment subaccounts.
   

Always read the contract and ask for a fee breakdown.

If you take out money before a set number of years (called the surrender period, usually 5–10 years), you might pay a penalty. These charges decline over time, so it's best to only use money you can leave alone for that period.

Yes, but differently:

• Your money grows tax-deferred — you don’t pay taxes on the interest or growth until you withdraw it.
   
• When you take money out, the earnings are taxed as ordinary income.
   
• If you withdraw before age 59½, there may be a 10% IRS penalty (unless it's inside an IRA or retirement plan).
   

• With fixed or fixed indexed annuities, your principal is protected — you won’t lose money due to market downturns.
   
• With variable annuities, you can lose money if the investments perform poorly.
   

An annuity may be a good fit if you:

• Want guaranteed retirement income
   
• Are looking for market protection or steady growth
   
• Want to supplement Social Security or a pension
   
• Can leave the money in for several years
   

But they’re not ideal for short-term goals or people needing immediate liquidity.