What are annuities? 

 

Broadly, annuities are financial products designed to help minimize the risk of an individual outliving their retirement savings and the risk that markets will perform poorly. An individual pays an insurance company one lump-sum payment or makes a series of payments, and in exchange, the insurance company provides a series of payments to the individual. These payments can be immediate or can take place years in the future. The duration of payments depends on the specifics of the contract made with the insurance company.

 

Annuities can make sense for clients who already have diversified portfolios and growth opportunities. Rather than focusing on maximizing returns, annuities are often positioned to support long-term income stability and reduce reliance on market timing. 

 

 

How can annuities fit into my plan? 

• Manage longevity risk - Longer life expectancy increases the importance of predictable income later in retirement. Some planning strategies use deferred income annuities that begin payments later in life, helping hedge against extended retirement timelines without requiring large early allocations from your retirement accounts.
• Support behavioral stability - Predictable cash flow often reduces anxiety during market volatility, helping investors maintain disciplined strategies. Industry surveys consistently show that a large majority of annuity owners report greater confidence in retirement income planning when guaranteed income is included.
• Enhance portfolio structure - Annuities may function as a stabilizing component within a segmented portfolio approach that balances growth, income, and liquidity. In many high-net-worth (HNW) portfolios, this structure allows growth assets to remain allocated toward long-term opportunities rather than short-term income needs.
• Diversify income sources - Many retirement plans rely on multiple income streams, including Social Security benefits, investment withdrawals, rental income, or dividends. Annuities can add another layer of diversification by providing contractual income that is not directly tied to market performance.
• Add a tax-advantaged investment - If you regularly max out your retirement accounts and have a large portion of liquid assets left over, a tax-deferred annuity can typically provide another avenue for tax-advantaged growth.

 

Deciding whether or not annuities are right for you requires a careful evaluation of fees, liquidity, and long-term goals. That’s where we come in. We can help you explore how annuities might complement your existing plan.

 

 

 

 

This presentation is not an offer or a solicitation to buy or sell securities. The information contained in this presentation has been compiled from third-party sources and is believed to be reliable; however, its accuracy is not guaranteed and should not be relied upon in any way whatsoever. This presentation may not be construed as investment, tax or legal advice and does not give investment recommendations. Any opinion included in this report constitutes our judgment as of the date of this report and is subject to change without notice.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2 available upon request or at the SEC’s Investment Adviser Public Disclosure website, www.adviserinfo.sec.gov. Past performance is not a guarantee of future results.