An annuity is a financial product designed to provide a steady stream of income, typically used for retirement planning. It is a contract between an individual and an insurance company, where the individual makes a lump-sum payment or series of payments in exchange for regular disbursements that can begin immediately or at some future date. Annuities come in various forms, including fixed, variable, and indexed, each offering different features and benefits. Fixed annuities provide guaranteed payouts, while variable and indexed annuities have payments that fluctuate based on the performance of underlying investments. Annuities are popular for their ability to offer financial security and peace of mind by ensuring a reliable income during retirement. Retirement advisors all agree - annuities should be part of a balanced portfolio. So, why are annuities overlooked so often?

Annuities often fail to capture attention because they lack the allure of tech stocks. However, they also offer stability without the associated risks. The complexity of different annuity types can further deter interest, complicating understanding and decision-making processes.

1. Fixed - A Fixed Annuity is a type of annuity contract offered by insurance companies that provides a

   guaranteed income stream in retirement, typically through a lump-sum payment or periodic contributions.

2. Fixed-Indexed - A Fixed Index Annuity (FIA) is a financial product designed to provide retirement income while offering potential interest growth based on the performance of a specified market index, such as the S&P 500. It is categorized as a type of fixed annuity, meaning it guarantees a minimum interest rate while also offering the opportunity to earn interest linked to market index performance.

3. Variable - A Variable Annuity is a type of annuity contract offered by insurance companies that allows you to invest in sub-accounts, which are similar to mutual funds. The value of your investment fluctuates based on the performance of these sub-accounts.

4. Immediate Income - A Variable Annuity is a type of annuity contract offered by insurance companies that allows you to invest in sub-accounts, which are similar to mutual funds. The value of your investment fluctuates based on the performance of these sub-accounts.

5. Deferred Income - A Deferred Income Annuity, also known as a longevity annuity or deferred annuity, is a type of annuity contract that provides guaranteed income payments that start at a future date, typically in retirement.

Guaranteed Income: Annuities provide a reliable stream of income, often for life or a specified period, offering financial security and peace of mind during retirement.

Tax-Deferred Growth: Many annuities allow your investment to grow tax-deferred, meaning you won't pay taxes on earnings until you withdraw them.

Protection from Market Volatility: Certain types of annuities, like fixed or indexed annuities, shield you from market fluctuations, ensuring your principal and earnings remain stable.

Personalized Options: Annuities can be tailored to meet individual needs, offering flexibility in payout structures, including immediate or deferred payments, lump sums, or periodic installments.

Legacy Planning: Some annuities allow you to designate beneficiaries, ensuring any remaining funds can be passed on to loved ones after your death.

Long-Term Care Benefits: Certain annuity riders provide additional benefits, such as funds for long-term care expenses, enhancing your financial safety net.

You could spend hours doing your own research. Or, you can get our free report that reveals the rates of various types of annuities and gives you tips on which one will fit your retirement goals.