Annuities can turn a lifetime of savings - or a 401(k) you just rolled out of a job - into income you cannot outlive. But they come in several types, with real trade-offs and a lot of confusing sales hype. The Jordan Insurance Agency is an independent, licensed agency in Charlotte, North Carolina that explains fixed and fixed-indexed annuities in plain English - the guarantees, the costs, and the fine print - with no pressure and at no cost to you. Start with the questions below.
Annuity Basics
- What is an annuity and how does it work?
- What are the different types of annuities?
- Fixed vs. indexed vs. variable annuity - what's the difference?
- Are annuities a good idea for retirement?
- What are the pros and cons of annuities?
- Are annuities safe?
Fixed Annuities & MYGAs
- What is a fixed annuity?
- What is a MYGA (multi-year guaranteed annuity)?
- Annuity vs. CD - which is better for safe money?
- How do fixed annuity rates work?
Fixed Indexed Annuities
- What is a fixed indexed annuity (FIA)?
- How does annuity indexing work (caps, participation rates, spreads)?
- Fixed indexed annuity - pros and cons
- Do annuities protect my money from a market crash?
Income & Guarantees
- How does guaranteed lifetime income work?
- Immediate vs. deferred annuity - what's the difference?
- How much monthly income will an annuity pay me?
- What is an annuity income rider (GLWB)?
- What happens to my annuity when I die?
Rolling Over a 401(k), IRA or Pension
- Can I roll my 401(k) into an annuity?
- Can I roll an IRA into an annuity?
- Is rolling a 401(k) into an annuity taxable?
- Annuity vs. leaving my money in my 401(k)?
- What should I do with my 401(k) after leaving a job?
- Should I take my pension as a lump sum or an annuity?
Costs, Access & Taxes
- What is a surrender period and surrender charge?
- What fees do annuities have?
- Can I take money out of an annuity?
- How are annuities taxed?
- Is there a penalty for withdrawing early?
- How do annuities work with RMDs?
Safety, Myths & Suitability
- Are annuities a scam? (an honest answer)
- Who should - and should not - buy an annuity?
- Are annuities FDIC insured?
Choosing an Agent
- Financial advisor or insurance agent - who should I use?
- How do I choose a trustworthy annuity agent?
Ready to compare coverage? Review our annuities and retirement-income guidance for available options and personal guidance.
How to Evaluate an Annuity for Retirement Income
An annuity is a contract with an insurance company, not a bank account or a one-size-fits-all investment. It may be designed for accumulation, future income, current income, or principal protection. The first step is to define the job the annuity would perform in your retirement plan. Someone seeking predictable lifetime income has a different objective from someone seeking tax-deferred growth or a protected portion of savings.
Know the major contract types
Fixed annuities credit interest according to the contract. Fixed indexed annuities link credited interest to an index formula while generally protecting the contract value from direct market losses, subject to the insurer's terms. Variable annuities use investment subaccounts and can fluctuate with market performance. Immediate and deferred income annuities convert a premium into a stream of payments beginning now or later. Guarantees depend on the insurer's claims-paying ability.
Compare access, fees, and surrender terms
Review the surrender-charge schedule, annual free-withdrawal provisions, market value adjustment, contract fees, rider costs, and tax treatment. Withdrawals before the applicable tax age can create additional tax consequences, and taking money beyond the contract's free amount may trigger a surrender charge. An annuity should not hold emergency funds that may be needed quickly.
Ask how income is calculated
Separate the account value, cash surrender value, and any rider benefit base; they are not always the same number. Ask whether income is guaranteed for one life or two, whether payments increase, what remains for beneficiaries, and whether a rider can change. Compare the result with Social Security, pensions, investment withdrawals, and other reliable income.
Questions for a licensed professional
- What specific retirement problem does this contract solve?
- What are the guaranteed and non-guaranteed values?
- How long is the surrender period, and when can money be accessed?
- What compensation, fees, and rider charges apply?
- How strong is the issuing insurer, and what happens at death?
Review the agency's annuity overview, retirement-planning resources, and 401(k) rollover guidance before deciding whether an annuity belongs in a broader plan.
.svg)
.svg)
