Annuities

Making the right investments and financial decisions now can make all the difference for you and your family. Whether planning for retirement or thinking more generally about securing your financial future, annuities can be an integral component of your portfolio. However, these financial instruments can also be complicated and even confusing; misunderstandings and miscalculations could prove costly. At the McCallum Agency, we’re here to help.

What Are They?

Annuities can generally be seen as investment tools. These products, often sold by insurance companies, can allow you to invest a lump sum now, which may be capable of significant growth while also potentially remaining stable and safe. Although exact parameters may vary, annuities can eventually be cashed out through a process called annuitization, which may provide a reliable and consistent income stream for a specific period or even throughout the rest of your life.

How Does a Fixed Annuity Work?

Fixed annuities are among the most commonly purchased types of these products and can cultivate predictable growth while limiting your financial risk. Specifically, fixed annuities can lock in your investment for the long haul, as your principal investment will not lose value. Meanwhile, your annuity can gain value at a guaranteed minimum interest rate that the stock market will not impact. These options may also require lower initial investments than other types of annuities.

What Are Other Types?

In addition to fixed annuities, you may also have the option of investing in the following:

• Variable annuities can offer greater growth potential than their fixed counterparts, albeit in exchange for greater risk. Your investment is tied to the stock market and may fluctuate with greater volatility.
• Indexed annuities may represent a middle ground between fixed and variable options, as their interest rates are tied to a specific market index, such as the S&P 500. This can allow for greater growth potential than fixed annuities, while many products may also include greater security for your initial investment than you’d have using variable annuities.
• Immediate annuities can address short-term needs, as you may begin to cash out your investment as a form of ongoing income as soon as within a year.

Learn More

Contact the McCallum Agency today to learn more about annuities and identify the right investments for your future.