Annuities are retirement savings vehicles that are issued by an insurance company. Unlike other investments like stocks and bonds, fixed annuities protect your money from a potential market downturn. There are 4 main risks in retirement that we are all going to face. Longevity is the largest risk because the longer we live the more likelihood you will be impacted by one of the remaining risks.
Stock Market Volatility is one of those risks and the longer you live the more likely it is you will be negatively impacted by volatility. An annuity can address both of these risks.
Income annuities convert a portion of your retirement nest egg into an income stream that is guaranteed to last your lifetime. Fixed and Fixed Index annuities provide a safe and steady way to grow your retirement savings without exposure to stock market risk.
Below is a table that compares and contrasts the 4 different types of annuities.