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Annuities

You know the importance of saving for retirement. But sometimes it's hard to know the best way to go about it. Annuities can help eliminate the guesswork by setting you up with a reliable retirement income stream.

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What Is an Annuity?

Simply put, an annuity is an insurance product that distributes ongoing payments to an individual for retirement income. There are various types of annuities and options to help meet your needs.

The Difference Between
Immediate vs. Deferred Annuities

Immediate Annuities

This structure is generally ideal for clients with an available sum of money to convert into lasting income (think an inheritance or Individual Retirement Account [IRA] rollover). Some benefits include:

  • Income payout options – like recurring payments over a fixed term, or until you die.
  • Start receiving income payments right away.
  • Possible death benefit paid out to people and causes of your choosing.

Deferred Annuities

This structure works well for clients who value tax efficiency and want a say in when they start taking out their money. Key features include:

  • No income tax payments until you’re ready to take money out.
  • Potential for your principal to grow before you start receiving payments.
  • No annual contribution limits (unlike IRAs and 401[k]s).

The Difference Between
Fixed vs. Variable Rates

Fixed Annuities

Under this rate option, your premiums earn interest at set rates – a current interest rate typically declared on an annual basis, and a minimum guaranteed interest rate.

  • Benefit: Fixed annuities are generally not affected by market volatility
  • Drawback: The value of the annuity may not keep pace with inflation, given the set interest rates

Variable Annuities

This rate option yields returns based on the performance of your investment’s subaccounts.

  • Benefit: Because funds are invested in variable subaccounts, they may keep up with – or outpace – inflation.
  • Drawback: The annuity’s investments are dependent on market risk and performance, and could lose principal.
  • Variable Annuities are distributed by Thrivent Investment Management Inc., review their Form CRS Relationship Summary to learn more