Retirement is not only about how much you have saved. It is also about how your savings may support the life you want, month after month, through years you cannot predict.
Mr. Medicare is not connected with or endorsed by the United States government or the federal Medicare program. Plan availability and benefits vary. This page provides general educational information and is not a complete description of any plan. Review official plan documents before enrolling.
People come to retirement with different concerns. Some want a dependable income stream. Some worry about market losses. Others want tax-deferred growth, a death benefit, or a way to complement Social Security, pensions, investments, and cash reserves. An annuity may support certain goals, but it is not the right answer for every person or every dollar.
Our annuity specialists in Houston begin by understanding your broader picture. We discuss income needs, other assets, time horizon, access to emergency funds, risk tolerance, health, beneficiaries, taxes, and the tradeoffs you are comfortable making. Any recommendation should be based on your financial situation, insurance needs, and suitability requirements.
An annuity is a contract with an insurance company. In exchange for one or more premium payments, the insurer provides contract benefits that may include tax-deferred accumulation, income options, and a death benefit. The details depend on the type of annuity and the specific contract.
A fixed annuity generally credits interest according to guarantees stated in the contract. Initial rates may be guaranteed for a limited period, and renewal rates may change subject to contract minimums. Surrender charges and withdrawal limits may apply.
A fixed indexed annuity credits interest using a formula linked to the performance of an external market index. The owner does not invest directly in the index. Caps, participation rates, spreads, crediting methods, and other limits affect credited interest. Index-linked interest may be zero in some periods, and surrender charges may apply.
Income annuities are designed to convert premium into a stream of payments that may begin soon or at a future date. Payment amount and duration depend on the contract, premium, age, selected income option, and other factors. Some elections are irrevocable or reduce access to the original premium.
Variable annuities involve investment risk and securities features. Contract value can rise or fall based on investment options, and fees can be significant. They are offered through appropriately licensed financial professionals and require a prospectus. Mr. Medicare should publish this section only if properly licensed and authorized to offer variable products.
Before recommending an annuity, an agent should consider information required by applicable law and carrier rules. This may include age, income, assets, liquidity needs, financial objectives, intended use, time horizon, tax status, risk tolerance, current insurance, and any proposed replacement or exchange. Never sign a form you do not understand.
Certain contract guarantees may be backed by the issuing insurance company, subject to the contract and the insurer’s claims-paying ability. Not every value or outcome is guaranteed. Index-linked interest, variable investment performance, non-guaranteed rates, and rider values may change.
It depends on the product and when funds are accessed. Surrender charges, market value adjustments, withdrawals, rider fees, taxes, penalties, variable investment losses, and insurer insolvency can affect value. Review the contract and disclosures carefully.
Earnings in a nonqualified annuity generally grow tax-deferred and may be taxable when withdrawn. Special rules apply to qualified retirement accounts, annuitized payments, early distributions, exchanges, and inherited contracts. Consult a qualified tax professional.
It is a period during which the insurer may charge a fee if withdrawals exceed contract allowances or if the contract is surrendered. The charge often declines over time, but schedules vary by product.
Concentrating all retirement assets in one product can create liquidity and diversification concerns. An annuity should be evaluated as one part of a broader plan, with sufficient accessible funds for emergencies and near-term expenses.
A tax-deferred exchange may be possible under Section 1035 of the Internal Revenue Code, but a new surrender period, charges, lost benefits, tax issues, and suitability concerns may apply. Compare the old and new contracts carefully before replacing coverage. Suggested button: Request an Annuity Conversation.