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.
An immediate annuity turns premiums into a series of income payments from an insurance company that begin within a year after you buy it. You decide how often (monthly, quarterly, or annually) and how long (over a set number of years or for as long as you live) you receive payouts. People usually buy this type of annuity with money from the sale of a home or business, life insurance benefits, or a savings account. Retirees also may use some of the money they have in a retirement plan—such as a 401(k) or IRA—to purchase an individual retirement annuity.
A deferred annuity allows savings to grow tax-deferred until payouts begin. You can use a deferred annuity as a way to save for the future and for income after retirement. People who are years away from retirement—or are retired and have assets but don’t need income right away—might choose this type of annuity.
In a deferred annuity, the period of time before you begin receiving payouts is called the accumulation phase. There are different types of deferred annuities that let you decide how your money grows during this time (accumulation options). The different types are fixed, index, or variable annuities.
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