Annuity Insurance
“Secure tomorrow with confidence. Annuity insurance provides a reliable income stream for your retirement, ensuring you enjoy the years ahead with financial peace of mind.”
What is Annuity Insurance?
Annuity Insurance is a financial product that turns your savings into reliable income, designed to support you throughout retirement. It offers unique benefits, including guaranteed income, tax-deferred growth, and various payout options to suit your financial needs. Annuities come in different types, such as fixed, variable, and indexed, each catering to different levels of risk tolerance and income preferences. This solution is ideal for those seeking a secure, predictable income to fund their retirement years.
At MBM Financial Services, we’re here to help you find the right life insurance and annuity solutions to secure a brighter future for yourself and those you love. Connect with us to explore your options and gain peace of mind with a financial plan tailored to your needs.
Importance of Annuity
Annuity insurance is a valuable financial tool, offering long-term security and peace of mind by transforming savings into guaranteed income during retirement. Here’s why annuities can play a crucial role in your financial plan:
Guaranteed Income
Annuities provide consistent payments for life, offering a dependable income source that helps reduce financial stress and ensures you can meet essential expenses and enjoy a comfortable retirement.
Tax-Deferred Growth
With annuities, your savings grow tax-deferred, allowing you to maximize your potential earnings over time. By deferring taxes until withdrawals begin, annuities help boost retirement savings and compound growth.
Flexible Payout Options
Annuities offer a variety of payout structures, including monthly, quarterly, or annual payments, allowing you to select a plan that aligns with your unique financial needs and lifestyle.
Lifelong Financial Security
Annuities protect against the risk of outliving your savings by providing payments for life. This helps ensure that you won’t have to worry about exhausting funds, giving you stability for the future.
How Annuities Work?
An annuity is a contract between you and an insurance company, designed to provide a steady stream of income during retirement. By investing a lump sum or series of payments into an annuity, you create a source of guaranteed income that can last for years or even your lifetime.
Annuities are designed to reduce the risk of outliving your savings, providing long-term financial security. By understanding how annuities work, you can decide if this solution aligns with your retirement goals and offers the income stability you desire.
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Types of Annuities
- Fixed Annuities
Fixed annuities are known for their stability and predictability. They provide a guaranteed interest rate over a set period, which ensures consistent growth without exposure to market fluctuations. This means you receive regular, dependable payouts, making them a popular choice for conservative savers seeking a low-risk income stream. - Variable Annuities
Variable annuities offer the potential for greater returns by investing contributions into sub-accounts that function similarly to mutual funds. These sub-accounts can be diversified across various asset classes, allowing the annuity’s value to grow based on market performance. While variable annuities provide opportunities for higher growth, they come with a degree of risk, as returns are subject to market fluctuations. - Indexed Annuities
Indexed annuities blend the stability of fixed annuities with growth potential linked to a stock market index, such as the S&P 500. With this type, returns are typically based on a portion of the index’s performance, providing an opportunity for growth while limiting downside risk through minimum guarantees.
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Frequently Asked Questions
Curious about how annuities work? Here are answers to some of the most common questions to help you understand annuities, their benefits, and how they can support your financial goals.
An annuity is a contract with an insurance company that provides a reliable income stream during retirement, helping to prevent outliving your savings.
Choosing an annuity type depends on your risk tolerance and financial goals: fixed offers stable income, variable allows growth potential with market risk, and indexed balances both with some downside protection.
Yes. Annuities grow on a tax-deferred basis, meaning you only pay taxes on earnings when you begin withdrawals, allowing more growth over time.
Yes, but early withdrawals may be subject to surrender charges and tax penalties if taken before age 59½, so it’s important to check your annuity’s terms.
Fixed annuities have set payments, so inflation may affect purchasing power. However, some annuities offer inflation-protection options, or you can choose variable or indexed annuities, which can help keep pace with inflation.
Annuities may include fees such as administrative fees, mortality and expense risk charges, and management fees for investment-based annuities. Variable annuities, in particular, may have additional fees.