annuities
Planning for the future with annuity coverage from your trusted Northern Michigan experts
Explore annuities from a reliable local source for personalized financial solutions. We can help you navigate the complexities of annuities with expert guidance to assess their suitability for your investment needs.
An annuity is an insurance product that’s mostly used as a part of retirement strategy. Annuity products are largely chosen by investors who want to receive a steady income stream in their retirement.
Types of annuities that we offer
There are two main ways to categorize annuities: immediate vs. deferred annuities and fixed vs. variable annuities.
Immediate Annuity vs. Deferred Annuity
Under immediate annuity, you will get guaranteed payments that begin soon after you make your initial payment. Unlike immediate annuity, deferred payment puts off your income payments for a period of time allowing the invested money to earn tax-deferred interest.
Fixed annuity vs. Variable annuity
With a fixed annuity, money is placed in fixed-rate investments such as bonds, where it will earn a fixed interest rate for a certain period of time. In contrast, under variable annuity money is placed in market-based investments such as stocks, bonds, mutual funds or money markets.
How do annuities function?
Annuities transform a lump sum into a steady income stream, akin to a reverse life insurance policy. Your upfront payment yields regular returns throughout your lifetime.
What risks are involved?
Two specific risks accompany annuities. First, the risk of early demise may result in receiving less than the upfront payment. Second, certain annuities are subject to investment risks, where returns hinge on market performance. Opting for an index-linked annuity can strike a balance.
Fixed and variable options:
Annuities offer both fixed amounts, determined by factors like age and health, and variable options tied to investment outcomes.
Is it the right investment for you?
The suitability of annuities and the appropriate risk level depend on your financial situation. Careful consideration of tax implications is crucial, especially if early retirement is a consideration.
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Reach out to us today to discuss your options and see if annuities are right for you!