Annuities are contracts between you and an insurance company that can be used as a financial planning tool to generate cash flow during retirement. While annuities aren’t appropriate for everyone, they do have their advantages. Like many retirement savings plans, annuities allow for tax deferred growth during the accumulation phase, up to the maximum amount allowed. Annuities also allow for tax deferral on any growth until the distribution phase. Many individuals choose to purchase annuities for the possibility of a lifetime income stream during retirement as stipulated in the annuity contract. Finally, annuities provide a death benefit to your beneficiaries if you were to pass during the accumulation phase.
You may want to consider an annuity if you are concerned about retirement income or have maxed out your contributions to your tax advantaged retirement plans or employer sponsored plans.
Centara Capital offers three types of annuities that can be purchased alone or used in conjunction with your financial plan:
- Fixed Annuities. Provides fixed income during retirement that is predetermined by the annuity contract and has a guaranteed return.
- Variable Annuities. Provides income that is variable, depending on the performance of the underlying investments.
- Index Annuities. Provides income that is dependent on an equity index, such as the S&P 500, with a minimum guaranteed return.