A paycheck for the years after the paychecks stop.
An annuity is a contract with an insurance company. You put money in, and it pays you back as income, either for a set number of years or for as long as you live. That is the whole idea. Everything else is detail.
The two kinds we work with most
Fixed
The carrier sets an interest rate for a period. Simple and predictable. Often used by people who want to know exactly what the money is doing.
Fixed indexed
Growth is linked to a market index, within caps and floors written into the contract. More upside potential than fixed, with the carrier absorbing the down years, in exchange for limits on the up years.
Rolling over a 401(k) or IRA
Money in an old 401(k) or an IRA can usually be moved into an annuity without a tax bill, if it is done as a direct transfer. The paperwork matters here, and so does timing. This is exactly the kind of move to make with a licensed agent and your tax professional in the room, not from a website.
Questions worth asking before you sign anything
- How long is the surrender period, and what does it cost to take money out early?
- What are the caps, floors, and participation rates, and can the carrier change them?
- Is there an income rider, what does it cost, and what does it actually pay?
- What happens to the money if I pass away early?
- Who is the carrier, and how are they rated?
If an agent cannot answer all five plainly, keep looking.
Wondering if one fits your plan?
Ask the assistant, or call and talk it through with a person.