Typically speaking, there are two types of annuities - deferred and immediate. As the respective name implies, a deferred annuity provides continuous income at a later date while an immediate annuity starts from the moment the policy begins. Regardless of the option you choose, you'll have a choice between a fixed and variable annuity. A fixed offers a guaranteed rate of return while a variable annuity means that the rate can fluctuate with the market. At Adams Insurance & Financials in Fayetteville, AR we will work with you to determine which type of rate is best for you. A variable annuity offers the potential for a higher return but comes with greater risk.
In addition to providing an additional income stream, an annuity can also help lower your tax bill. Opting for a deferred annuity can be beneficial in retirement because the interest is tax-deductible and compounds with every year. Upon withdrawal of the money, the gains in your annuity are taxed as regular income.
With a fixed annuity the risk is taken by the insurance company that issues the policy and the funds are most often placed in highly-rated bond funds that offer consistent year over year growth. Conversely, a variable annuity places the risk on the policyholder because you'll have the ability to choose from a wider selection of investments to include individual stocks and mutual funds.
While choosing the type of annuity may seem complicated, at Adams Insurance & Financial in Arkansas are highly trained, competent, and professional staff will take the time to walk you through your options and help you choose the option that is best for you and your family. We recognize that you have a choice when it comes to your insurance company and strives to earn your business with respect and knowledge. If you are in Arkansas, give us a call today and schedule your no-obligation appointment.