"Everything You Need to Know About Annuities"

Planning for the future is one of the most important steps we can take to give ourselves and our families peace of mind. Annuities are financial tools that can help provide that sense of security and stability, especially when thinking about retirement. Let’s take a closer look at what annuities are, the different types available, their benefits, and what you should consider before choosing one.

What is an Annuity?

An annuity is a contract, usually offered by insurance companies, where you invest money in exchange for future payments. Those payments can start right away or at a later date, and they may last for a set period of time—or even for the rest of your life.

Types of Annuities

There are several types of annuities, and each one has its own advantages:

• Fixed Annuities: Provide steady, guaranteed returns—perfect if you’re looking for security and predictability.

• Variable Annuities: Let you invest in mutual funds, so your returns can grow with the market (but may also go down).

• Indexed Annuities: Combine the safety of fixed annuities with the potential growth of variable ones, since returns are tied to a market index.

Benefits of Annuities

Annuities offer benefits that can be especially valuable for our community:

• Financial Security: They provide regular income, which can be a lifeline in retirement.

• Tax Advantages: Earnings are tax-deferred, meaning you don’t pay taxes until you start withdrawing money.

• Flexibility: You decide how much you want to contribute and how long the payments should last.

Things to Keep in Mind

Before investing in an annuity, it’s important to be aware of a few key points:

• Costs and Fees: Some annuities come with high administrative fees or commissions.

• Liquidity: There may be limits on when you can take out money without penalties.

• The Fine Print: Always review the contract terms carefully to understand exactly what you’re signing.

Conclusion

Annuities can be a powerful tool to secure a steady income and protect your future. But like any financial decision, it’s important to choose the option that truly fits your needs and goals.

At CEA, our experts are here to guide you and help you find the annuity that works best for your retirement plan—so you and your family can look to the future with confidence.