What is an annuity?
An annuity is a long-term retirement savings vehicle that provides payments to the contract holder at specified intervals by an insurance company. It can be used to accumulate assets on a tax-deferred basis for retirement and/or to convert retirement assets into a stream of income. Annuities may be single premium meaning you give the insurance carrier one lump sum, modified single premium meaning you can make premium payments during the first contract year, or they may be flexible premium which means you can make multiple premium payments.
What retirement planning needs can an annuity meet
- Build your retirement nest egg
- Diversify your retirement assets
- Increase safe, predictable earnings on savings
- Guarantee a lifetime income stream
- Gain flexibility to fund unexpected events, like critical illness or nursing home care
- Transfer assets to your heirs
What types of annuities does Confluence PNW offer?
FIXED INDEXED ANNUITIES
A fixed indexed annuity provides the potential to earn interest linked to the return of an index. A fixed indexed annuity uses a formula, subject to a cap, spread, and/or participation rate, to credit interest on annuity premiums based on changes in a market index. A fixed indexed annuity also provides a minimum guarantee, meaning that it has less equity performance risk than variable contracts.
A fixed annuity will return your principal and a certain guaranteed return over a specific period of time. If you know you will retire at a certain date and have known expenses, this may be a good option for you. A fixed annuity credits interest on the premiums paid in the contract, less any applicable charges. Fixed annuities also include a guaranteed minimum interest rate – the lowest rate the annuity can earn.
An immediate annuity pays a stream of income immediately after it’s purchased or for a set period later. A person who has already retired may find this a useful way to safely increase spending to cover daily living expenses.