Annuities and Access to Your Money

Publications and Resources

A Woman's Guide to Annuities. Retirement tends to be a bigger challenge for women: lower lifetime earnings equal lower retirement income. Women also live longer than men and must make income last for a longer period of time. Annuities may help women overcome retirement obstacles.

The Individual Annuity: A Resource In Your Retirement. This guide has been prepared to help retirees understand what an individual annuity contract is, what options are available, and how the right choice might enhance retirement security.

Individual Annuities: Purchasing Tips. An annuity is a long-term financial contract. You should enter into an the annuity arrangement only after a thorough review of your personal finances and retirement goals. To help you better understand what to consider before purchasing, review these tips.

Payout Options

Annuities offer flexibility in the way you can receive payouts. You usually can choose from a number of options how long you want income payouts to last and if you alone or you and someone else will receive the payouts. The options you choose will influence the amount of money you receive. Some common forms of payout include:

Guaranteed Income for Life

  • Life income: With this option, you receive income for as long as you live, even if the total payouts are more than you paid in premiums. When you die, no further payouts will be made to anyone, not even your dependents. This income option, also known as a straight life option, usually pays the highest total income payout. Why do you never run out of income? Because annuities have an insurance element that pools resources and shares longevity risks across large groups of individuals.
  • Joint and survivor life income: This option provides income for as long as you or the survivor live. The total income payout is less than in a life income option.
  • Life income with refund: With this option, you receive income for life and, if you die before receiving an amount equal to the premiums you paid, your beneficiary collects the portion you hadn’t yet received.
  • Life annuity with period certain: Payouts are made to you for as long as you live. When you purchase your annuity, you select a period of time (the “period certain”), typically 10 or 20 years. If you die within the period certain and you’ve already started to receive income, your beneficiary will receive regular payouts for the rest of that period.

Options Without Life Income

Annuities offer other income options that don’t guarantee income payouts for your lifetime. For example, you may be able to choose to receive income in a series of payouts for a set number of years, or if you have a deferred annuity, in a lump sum.

Withdrawal Options

Most deferred annuities let you take a certain percentage (usually 10%) of your money out each year during the accumulation phase (when you’re still paying premiums and haven’t started to receive payouts) at no cost.

If you withdraw money from an annuity or cash it in early to buy another annuity or for any other reason, there may be a surrender fee or withdrawal charge in the early years of a contract.

Note: Withdrawals from your annuity contract also may reduce the death benefit available or any guaranteed living benefit.


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