Annuities & Insurance

♦ ANNUITIES

Annuities are available to those who seek tax deferred earnings and have the ability to make unlimited contributions.

An individual purchases a deferred annuity contract issued by an insurance company that offers a fixed or variable investment option from which to choose. An annuitant receives a steady stream of income payments at retirement depending on the distribution option chosen or may be able to receive a lump-sum distribution. A fixed annuity pays an interest rate guaranteed by the issuing insurance company, which can change annually. A variable annuity’s value depends on performance of its underlying investments. There’s no limit on annual contributions to an annuity.

Although fixed and variable annuities can often play a critical role in, for example, estate planning, they are sometimes sold to the wrong investors. Annuities can be an important investment option, but only in appropriate situations. It’s important, then, for investors to receive expert guidance in deciding whether they should purchase annuities. The investment professional at Anchor Bay can help you make these decisions.