Steve Kerby

Oregon Financial Group

Which Annuity Is The Right Fit For You?

 Choosing the Right Annuity for You

Preparing for retirement is no easy task. You have to think about so many things, from the size of your nest egg to how you'll actually spend your golden years. But one of the key questions you're probably asking is: how can I generate a stable income when I stop working? The answer may lie in annuities.

Annuities come in various flavors, and choosing the right one depends on your financial goals, risk tolerance, and even your marital status. Let's dive into the four main types of annuities so you can decide which is the best fit for you.

Fixed Annuity

A Fixed Annuity is the financial equivalent of a cozy, comfy sweater. Why? Because it provides a guaranteed, fixed rate of return every month. This option is perfect if you're risk-averse and prefer a reliable stream of income rather than the rollercoaster ups and downs of the stock market.

Here's the catch: With a Fixed Annuity, you'll want to let your principal sit untouched. You only take out the interest earned. After your contract matures, you have two choices: roll over the funds to continue with new rates or withdraw the principal and any untaken interest to invest elsewhere. If you pass away, don't worry—your beneficiaries will receive the funds. And guess what? There are zero fees associated with this type of annuity.

Immediate Annuity

Craving instant income? An Immediate Annuity might be your go-to option. Imagine this as a personal pension plan. Once you make an initial payment, you start receiving a steady income for life, or if you're married, for the life of both you and your spouse.

Be cautious about fees. While some providers offer Immediate Annuities with no fees, others might charge. So, always ask about any hidden fees before you make a purchase.

Variable Annuity

This option is for those of you who like a little—or a lot—of risk in your financial plans. Your returns vary based on how well the stock market performs. While this can yield high rewards, remember, you could also lose money. Another thing to watch out for is fees. Make sure you get a full rundown of all the charges and expenses you'll incur.

Fixed Index Annuity

Finally, let's discuss the best-of-both-worlds option: the Fixed Index Annuity. Imagine enjoying stock market gains without enduring the gut-wrenching drops. Sounds like a dream, right? Your income will be fixed (though some offer increasing income options), and you'll may still get the chance for your account to grow.

If you're planning to pass down assets and don't need immediate income, some Fixed Index Annuities are designed to offer great returns without losing the principal. But keep an eye out for fees ranging from 0% to as high as 2%, especially if you opt for additional benefits or riders.

What's Next?

Choosing an annuity is a critical decision that requires understanding your goals, risk tolerance, and needs. Consult a financial advisor who will ask the right questions to help determine the best annuity for you. And remember, the annuity you choose will likely be one of the building blocks of your retirement, so choose wisely!

  • Fixed Annuity: Ideal for those seeking a reliable, fixed income without the stock market risks. No fees involved.
  • Immediate Annuity: Think of it as a personal pension plan that gives you immediate income for life. Check for fees before purchasing.
  • Variable Annuity: For the risk-takers who can tolerate stock market volatility. Be cautious of multiple fees and charges.
  • Fixed Index Annuity: Offers the best of both worlds—stock market gains without the losses. Some fees might apply, especially if you opt for additional benefits or riders.
Steve Kerby picture

Steve Kerby

Oregon Financial Group

5555 SW 196th Ave.

Aloha, Oregon 97078

kerbyofg@aol.com

(503) 936-3535

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