What Are Annuities?

And what are your options?

Annuities are insurance contracts that provide regular payments usually during retirement. Annuities may help you grow or protect your retirement income or provide you with guaranteed income during retirement. The right annuity will help you save money while earning a reasonable rate of return.**

There are several types of annuities.

Types of Annuities

Fixed Annuities

Fixed annuities offer the benefit of protecting your money, but at a fixed rate of interest.

Variable Annuities

Variable annuities carry greater risk because their rates are based on market movements. Therefore, with variable annuities, your principal is at risk.

Fixed Indexed Annuities (FIAs)

FIA payments are based on an index such as the S&P 500. However, FIAs generally protect your money from losses, because it does not invest directly in the stock market. Instead, your money links to an index, not the stock market. As the index goes up, so do your returns. However, if the FIA index falls, your money does not fall with it. Therefore, with FIA, you can preserve your principal while earning a reasonable rate of return**. For many retirees, FIAs help them reach their retirement goals.

Myths About Annuities

Myths surround how annuities are earned. Some agents may say that certain annuities are not good. Why? The most common way brokers make money is by managing client dollars in the stock market. Annuities may make some agents money, but they still may not suggest them. They would rather make more money managing money in the market.  

Moreover, annuities are not all the same. Some agents do offer annuities. However, many of those products depend on the market. As a result, you could lose your principal if the market crashes.

GPS Retirement is different.

We work with reputable companies that put clients’ needs first without putting their money at risk. 

senior couple meeting with financial advisor to talk about what are annuities warwick ri
middle aged smiling couple walking the beach hand in hand what are annuities warwick ri

Choosing the Right Annuity

We use a thorough approach to determine if annuity income makes sense for you. First, we explain the market in a dinner seminar. Our retirement seminars explain the differences between annuities and most retirement vehicles. Then, we will discuss your retirement strategy individually. Here are a few factors we discuss together:

  • What are annuities and the benefits?
  • Where you are on the retirement journey
  • Your current liquid asset holding
  • The availability of that cash in an emergency
  • Your comfort level with risk
  • Can an annuity income cover expenses?
  • All this and much more

Let’s schedule a no-cost meeting.

GPS Retirement helps clients protect their retirement income.

We understand that protecting your money during retirement is important We can provide more information on fixed index annuities.

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