Annuities are often a popular investment vehicle to supplement retirees’ Social Security benefits, guaranteeing a lifetime income stream. Considering that only about 35 percent of retirees have a pension, having an annuity can provide a sense of security and confidence that you won’t outlive your money.

Annuities are insurance products, so, naturally, they are sold by insurance companies. You can think of an annuity as a policy between you and the company, where you pay a premium in exchange for a specified payment, over a specified amount of time.  However, there are other financial institutions where you can establish an annuity. Those include:

– Brokerage firms

– Independent broker-dealers and large banks

– Mutual fund companies

– Independent insurance agents and financial advisors

Keep in mind, that while the annuity market is regulated, annuities are not federally guaranteed, so you should be cautious and consult a tax or financial advisor, before taking any action. Here are some important things to consider when you are researching annuities and where to buy them:

– Consider the provider’s ratings from independent rating companies, such as Standard & Poor’s or Moody’s

– Check minimum fees and administrative charges

– Look at online reviews

– Research the financial institution’s strength and track record

If you decide an annuity is right for you, you’ll need to find the right type to meet your individual needs. This product is complex, so do your homework. There are annuities that begin paying you pretty quickly. There are also deferred annuities that are tax-deferred. With these you don’t receive money until your funds have grown. You can also choose between a low-risk annuity or one with more risk that is dependent on the stock market.

Again, it’s important to stress the value of consulting with an accounting advisor or financial planning professional before signing an annuity contract.

When you are ready, you can buy an annuity with cash, brokerage account funds or retirement account assets. There are many companies that sell annuities.  For both a great introduction on the subject and further information on specific annuity offerings, consult blueprintincome.com.

We are always here to help guide you in making these types of decisions, as well as all of your other important financial decisions. Please call to schedule an appointment with one of our accounting advisors today.