Income you won’t outlive, explained honestly
An annuity turns savings into income you can count on in retirement. Money grows tax-deferred during the accumulation phase, then pays out on a schedule during the payout phase. We’ll explain the trade-offs plainly, including the fees and surrender terms other conversations tend to gloss over.
Four kinds of annuities
- Fixed — interest rate set by the carrier
- Variable — invested, returns follow the market
- Immediate — payments start shortly after deposit
- Deferred — grows first, you choose when payments start
“Will this actually last as long as I do?”
That’s the real worry behind most retirement-income conversations, and it’s a fair one. An annuity is one way to turn savings into a guaranteed schedule instead of a balance you’re hoping lasts — worth understanding alongside your other retirement accounts, not instead of them.
Fixed Annuities
Earn interest at a rate set by the insurance company. Very little risk — the trade-off for that stability is a more modest, predictable return than a variable annuity might offer.
Variable Annuities
Your contributions are invested, so returns depend on market performance. Higher potential upside, with real downside risk — worth understanding the fee structure before committing.
Immediate & Deferred
Immediate annuities begin paying out shortly after your initial deposit — useful at or near retirement. Deferred annuities let your money grow over time and you choose when payments start.
Annuities usually come up at one of three points
Nearing retirement and wanting a floor of guaranteed income underneath Social Security and savings. Already maxing out an IRA or 401(k) and looking for another tax-deferred place to grow money. Or having come into a lump sum — an inheritance, a sale, a settlement — and wanting it to pay out on a schedule instead of sitting exposed to market swings or getting spent down too fast.
None of that means an annuity is automatically the right move — the fees and surrender terms vary a lot by product, and a good conversation covers what you’d give up as honestly as what you’d gain.
Tell us where you are in retirement planning
Already retired, a few years out, or just starting to think about it — tell us where you are and we’ll come back with real options. No cost, no obligation.
Serving Maryland.