Annuities · Retirement income
Turn an income question into a contract you can understand.
An annuity is a long-term insurance contract—not a universal answer to retirement. Before comparing products, map the income gap, liquidity needs, time horizon, and the guarantees that matter.
Begin with the gap
What must arrive every month—regardless of the market?
Housing, food, health care, insurance, and recurring obligations.
Social Security, pensions, and other dependable sources.
The portion that may need a different income strategy.
Illustration only. A real review also considers inflation, taxes, longevity, survivor income, assets, and access to funds.
Different annuities make different contractual promises.
Product names matter less than the job you need the contract to do. Every comparison should show guarantees, non-guaranteed elements, charges, access rules, and the issuing insurer.
Fixed annuity / MYGA
Credits a stated rate for a defined guarantee period, subject to contract terms. Compare term, surrender schedule, renewal treatment, and insurer strength.
Fixed indexed annuity
Credits interest using a formula tied to an external index. It does not mean direct ownership of the index. Caps, participation rates, spreads, and crediting methods can change.
Income annuity
Exchanges a premium for income that may begin now or later. Payout options, life contingencies, survivor benefits, and access to principal vary.
Existing annuity review
Reads the contract you already own before discussing a change: guarantees, riders, surrender value, tax basis, income options, and replacement consequences.
Fit before features
A useful answer can be “not yet” or “not this.”
It may be worth exploring when…
- You have a clearly defined retirement-income gap or principal-protection objective.
- You have adequate liquid reserves outside the contract.
- You understand the surrender period and expect to hold the contract long enough.
- The contractual guarantees solve a need other resources do not fully address.
Pause and ask more questions when…
- You may need substantial access to the funds during the surrender period.
- The recommendation depends primarily on a bonus or illustrated rate.
- You have not compared the contract with existing pensions, Social Security, and other assets.
- The replacement would forfeit benefits or restart surrender charges without a documented advantage.
What a review should produce
Not a pitch. A decision record.
Income-gap map
Liquidity check
Contract comparison
Questions and next steps
Questions worth asking
Understand the contract, not just the pitch.
Are annuities FDIC-insured?+
No. Annuities are insurance contracts, not bank deposits, and are not FDIC- or NCUA-insured. Guarantees depend on the claims-paying ability of the issuing insurer.
What is a surrender charge?+
A contract may charge a declining fee when withdrawals exceed the free-withdrawal provision during a stated period. A market value adjustment may also apply to some contracts.
Can an indexed annuity lose money?+
Contract values may be protected from direct market losses under stated terms, but withdrawals, surrender charges, market value adjustments, rider costs, and other contract provisions can reduce value. Index-linked interest may be zero in some periods.
What happens to an annuity when I die?+
It depends on the contract, ownership, annuitization choice, and beneficiary designation. Some options prioritize income, liquidity, or survivor benefits differently.
Should I exchange an existing annuity?+
A 1035 exchange can defer current taxation when properly executed, but tax treatment is only one factor. Compare surrender charges, guarantees, riders, income base, insurer, and the new contract’s surrender period.