Why Buy an Annuity?

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About Brad Rhodes

Since 1992, Brad has considered it an absolute pleasure working with pre-retirees and retirees and feels blessed with his God-given role in life. As the host of the Safe Money & Income Radio show, Brad enjoys teaching people how to protect their hard-earned money. To be able to have genuine guarantees with your retirement dollars and income is what a lot of folks are wanting. “With the uncertainty in today’s economic environment, I can sleep at night, knowing that my clients have never lost a dime of their retirement funds with our recommendations. There is something special about helping people have peace of mind about their retirement future. It is my sincere wish to give you that peace of mind.”

The ins and outs of an annuity. 

Annuities are interesting products for persons looking to add a steady, predictable income stream in retirement. There are several reasons why a person might choose to buy an annuity:

  • Guaranteed income: One of the main reasons people buy annuities is for the guaranteed income they provide. With an annuity, the individual receives a steady stream of income for a specified time, such as 10 years, 20, the balance of their lifetime, etc. giving a sense of financial security and predictability to the annuitant.
  • Retirement income: Many people buy annuities to supplement their Social Security, any existing pensions they might hold, or other sources of retirement income. An annuity may provide a stable source of income to help cover living expenses after retirement.
  • Tax benefits: Depending on the type of annuity and the individual’s tax situation, an annuity may offer tax benefits. For example, with a deferred annuity, an individual can invest on a pre-tax basis, allowing the money to grow tax-free until it is accessed.
  • Inflation protection: An annuity can protect against inflation, as the payments may be indexed to inflation, which can help to maintain the purchasing power of the individual’s income over time.
  • Tax deferral: An annuity tax deferral refers to the ability to postpone paying taxes on the investment gains until the annuity has reached maturity. This feature is available with a deferred annuity, which allows an individual to invest money on a pre-tax basis, and the money can grow tax-free until it is withdrawn.

The tax benefits of a deferred annuity can be significant, as the individual can allow their money to grow tax-free until they begin taking distributions, typically at retirement. However, once the individual starts taking distributions, they will be taxed on the investment gains at their ordinary income tax rate. Additionally, if the individual withdraws money before age 59 1/2, they may be subject to a 10% federal tax penalty.

It is essential to consider the tax implications of an annuity before buying one, so consulting with your tax professional and a financial advisor or an insurance professional before purchasing one is recommended. It is critical to understand that annuities are long-term investments with the potential to create safety and peace of mind during retirement.

Many people have learned about the power of using the Safe Money approach to reduce volatility. Our Safe Money Guide is in its 20th edition and is available for free.  

It is an Instant Download.  Here is a link to download our guide: 

Safe Money Guide – Annuity.com

About Brad Rhodes

Since 1992, Brad has considered it an absolute pleasure working with pre-retirees and retirees and feels blessed with his God-given role in life. As the host of the Safe Money & Income Radio show, Brad enjoys teaching people how to protect their hard-earned money. To be able to have genuine guarantees with your retirement dollars and income is what a lot of folks are wanting. “With the uncertainty in today’s economic environment, I can sleep at night, knowing that my clients have never lost a dime of their retirement funds with our recommendations. There is something special about helping people have peace of mind about their retirement future. It is my sincere wish to give you that peace of mind.”

View The Best Annuity Rates Available Now

Annuities are a safe and reliable investment. They can transform your savings into a more predictable income. Speak with one of our qualified financial professionals today to find out how an annuity can offer you guaranteed monthly income for life.

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Content in our posted articles is deemed to be accurate but topics, facts and laws can change. It is always a good idea to verify facts before making decisions. Always seek authorized and professional advice regarding financial decisions which includes investing, annuity purchases, tax planning, changes in a financial portfolio and retirement planning.

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