Secure Your Financial Future with Annuities

Annuities can play a crucial role in your retirement strategy by providing a guaranteed income stream, which complements other retirement income sources like Social Security and 401(k)s. They can help create a financial foundation that ensures you don’t outlive your savings.

The exact fit depends on your unique financial situation, retirement goals, and risk tolerance. For instance, if you’re concerned about market volatility affecting your retirement income, a fixed annuity could provide stability. Alternatively, if you’re looking for growth potential with some downside protection, an indexed annuity might be more suitable.

At PWYB, we analyze your entire financial picture to determine how an annuity can best support your retirement objectives.

Annuities offer tax advantages that can be beneficial in retirement planning:

• Tax-deferred growth: The money in your annuity grows tax-free until you start taking withdrawals.
• Taxation on withdrawals: When you receive payments, only the earnings portion is taxed as ordinary income. The principal (your initial investment) comes out tax-free.
• Roth option: Some annuities can be purchased with after-tax dollars, potentially allowing for tax-free income in retirement.

However, withdrawals before age 59½ may incur a 10% IRS penalty on the taxable portion. The tax treatment of annuities can be complex, and it’s important to consider how it fits into your overall tax strategy. Our PWYB advisors can help you understand the tax implications specific to your situation and how to optimize your annuity for tax efficiency.

Selecting the right annuity type depends on your financial goals, risk tolerance, and retirement timeline. Here’s a brief overview:

• Fixed annuities offer guaranteed rates and are ideal for those prioritizing stability and predictable income.
• Indexed annuities provide potential for higher returns linked to market performance, with some downside protection.
• Variable annuities offer the highest growth potential but come with more risk, suitable for those comfortable with market fluctuations and seeking long-term growth.

Your choice should align with your overall financial strategy. Factors to consider include:

• When you need the income to start
• How much growth potential you’re seeking
• Your risk tolerance
• Your current and projected tax situation
• Your estate planning goals

At PWYB, we take a holistic approach to help you compare options and select the annuity type that best fits your unique financial landscape. Our personalized analysis considers your entire financial picture to recommend the most suitable annuity strategy for your needs.

While often associated with retirees, annuities can be beneficial for younger individuals too. They offer tax-deferred growth, which means your money can compound over time without being taxed until withdrawal.

For those in their 30s or 40s, certain types of annuities can provide a balanced approach to long-term financial planning, combining growth potential with future income security. However, it’s crucial to consider factors like your overall financial situation, goals, and the specific terms of the annuity. Our advisors can help determine if an annuity aligns with your long-term financial strategy.

The outcome depends on the type of annuity and how it’s structured. Many annuities offer death benefit options that allow you to pass the remaining value to your beneficiaries. For instance:

• With a life annuity with a guaranteed period, payments continue to your beneficiary for the remainder of the guaranteed period.
• Some annuities allow your beneficiary to receive the remaining account value in a lump sum.
• Joint and survivor annuities continue payments to your spouse after your death.

At PWYB, we can help you understand and choose options that align with your estate planning goals.

Yes, but with some considerations. Most annuities offer ways to access your money, but there may be penalties or surrender charges for early withdrawals, especially in the first few years. Some key points:

• Many annuities allow annual withdrawals of 10-15% without penalty.
• Some offer waivers for specific circumstances like nursing home care.
• Withdrawals before age 59½ may incur a 10% IRS penalty on the taxable portion.

It’s important to view an annuity as a long-term financial tool. At PWYB, we can help you structure an annuity that provides the right balance of security and flexibility for your needs.