What Is an Annuity? A Retiree’s Guide

Annuities can be a valuable income tool in retirement, but they’re often misunderstood. At its core, an annuity is a contract with an insurance company: you pay into it—either in a lump sum or over time—and in return, you receive regular payments for a set period or for the rest of your life. For retirees, this can mean predictable, reliable income that supplements Social Security, pensions, or investment withdrawals.

There are different types of annuities to suit different goals. Some start paying right away (immediate annuities), while others are designed to grow over time (deferred annuities). You can choose between fixed options with guaranteed returns, variable ones tied to market performance, or indexed annuities that offer a mix of both.

The biggest advantage? Annuities help reduce the risk of outliving your savings. But it’s important to understand the fees, payout options, and how an annuity fits into your broader retirement income strategy.

If you want to explore how annuities could bring stability to your retirement, let’s have a conversation. Our team can help you evaluate the right options based on your needs.