Annuity FAQ - Frequently Asked Questions

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An annuity is a financial product offered by insurance companies that provides a steady stream of income, often for retirement. You invest money— either as a lump sum or through a series of payments— and in return, the insurer agrees to pay you periodically in the future.

Annuities work by converting your contributions into a series of future payments. These payments can begin immediately (immediate annuity) or at a later date (deferred annuity), and may be fixed, variable, or indexed depending on the type.

• Fixed Annuities – Provide guaranteed payments and a set interest rate.
• Variable Annuities – Payments fluctuate based on market performance of selected investments.
• Fixed Indexed Annuities (FIA) – Offer returns tied to a market index (like the S&P 500) with downside protection.
• Immediate Annuities – Begin paying income almost immediately after a lump-sum payment.
• Deferred Annuities – Payments start at a future date, allowing your investment to grow tax-deferred.

Annuities are often ideal for individuals seeking:

• Guaranteed lifetime income
• Tax-deferred growth
• Protection against outliving savings
• Estate planning and legacy solutions
  They can benefit retirees, pre-retirees, and conservative investors looking for stability.

Fees vary based on the annuity type and features. Common charges include:

• Surrender charges for early withdrawals
• Mortality & expense risk fees (mostly for variable annuities)
• Rider fees for optional benefits like income guarantees or long-term care

We help you compare options transparently here. 

With fixed and fixed indexed annuities, your principal is generally protected from market losses. Variable annuities, however, carry investment risk and can lose value depending on market performance.

Yes. While your money grows tax-deferred, any withdrawals—especially earnings—are subject to ordinary income tax. Withdrawals before age 59½ may also incur a 10% IRS penalty.

That’s where Annuity411.org comes in. We help you evaluate your financial goals, retirement needs, and risk tolerance to determine if—and which—annuity might fit your strategy. You can schedule a free, no-obligation consultation right on our site.

Annuity411.org connects consumers with licensed professionals and top-rated annuity providers. We are not tied to any one insurer, and we don’t charge users for our tools or educational resources. Some partners may compensate us if you choose to work with them.

It’s easy. Schedule Your Complimentary Consultation to connect with a licensed expert who will walk you through your options based on your personal goals.