Benefits & Risks
Understanding both the advantages and potential drawbacks of annuities is crucial for making informed decisions.
Benefits
Guaranteed Income
Secure a steady stream of income that lasts throughout retirement.
Tax-Deferred Growth
Grow your investment without paying taxes until withdrawal.
Customization Options
You can tailor annuities with features like guaranteed minimum income benefits, death benefits, or inflation protection.
Protection from Market Downturns
Fixed annuities and certain riders on variable annuities provide a guaranteed return, regardless of market performance.
Legacy Planning
Some annuities offer death benefits, allowing you to pass on assets to beneficiaries.
Risks
Limited Liquidity
Access to funds may be restricted or subject to surrender charges.
Inflation Risk
Fixed payments may lose purchasing power over time.
Market Risk
Variable annuities are subject to market fluctuations.
Fees and Charges
Many annuities have high fees, including administrative fees, mortality and expense risk charges, and surrender charges.
Interest Rate Risk
Fixed annuities may have low returns, particularly in a low-interest-rate environment, which can reduce the growth potential.
Need Help Deciding?
Our experts can help you weigh the benefits and risks based on your specific situation.
