Pembroke Pines, FL Mon to Fri, 8am to 5pm
michael@fcifs.com 561-234-8810
First Community Insurance & Financial Services
HomeMedicareServicesLife InsuranceAnnuitiesHealth / ACALong-Term CareAboutReviewsService AreasContact Call 561-234-8810

Fixed annuities, indexed annuities and income riders

Guaranteed income is the part of retirement Social Security does not fully cover

Social Security covers part of retirement, but for most households it does not cover all of it. An annuity turns a portion of your savings into income you cannot outlive. Michael, a ChFC and CLU with 36 years in the business, compares fixed and indexed annuities and income riders so the guarantee fits your plan.

Call 561-234-8810
Independent broker Pembroke Pines & Broward County Licensed in 6 states

Written and reviewed by , licensed independent insurance broker serving Pembroke Pines, Florida. Last reviewed .

The gap

Why guaranteed income matters

Retirement income usually comes from three places: Social Security, savings, and any pension. For most households, Social Security replaces well under half of pre-retirement income, and a pension is rarely part of the picture anymore. That leaves savings to carry the rest, and savings can run out.

An annuity closes that gap by converting a portion of savings into income that is guaranteed to continue, in many cases for the rest of your life. Michael helps you decide how much of your money should carry a guarantee and how much should stay liquid.

Your options

Three ways annuities are structured

These trade growth, guarantees and flexibility differently. Which one fits depends on your timeline, your risk tolerance, and how much certainty you want.

Fixed Annuities

A set interest rate for a set term, with your principal protected. The return is predictable and you know what you are getting. The tradeoff is limited upside, which makes fixed annuities a fit for the part of your savings you want to keep safe and growing steadily.

Fixed Indexed Annuities

Growth tied to the performance of a market index, with a floor that protects you from market losses. You give up some of the upside in exchange for not losing principal in a down year. A fit for someone who wants more growth potential than a fixed rate without market risk to principal.

Income Riders

An optional feature added to an annuity that guarantees a stream of lifetime income, often with the amount growing until you turn it on. This is the piece that turns an annuity into a paycheck you cannot outlive, and it is where the details between carriers matter most.

How Michael chooses

What goes into the recommendation

Annuities carry more fine print than most insurance products, so the comparison matters.

The factors Michael weighs with you:

  • When you want the income to start
  • How much certainty you want versus growth potential
  • The surrender period and how much access you need to the money
  • The strength and ratings of the issuing carrier
  • How the income rider actually calculates your payout
  • Tax-deferred growth and how distributions are taxed

Because the details between carriers vary so much, this is a product where an independent comparison is worth the time.

Questions

Annuities questions

What is the difference between a fixed and an indexed annuity?
A fixed annuity pays a set interest rate for a set term with principal protected. A fixed indexed annuity ties growth to a market index with a floor that prevents losses, so it offers more growth potential in exchange for a cap on the upside. Both protect your principal from market losses.
Can an annuity really provide income for life?
Yes, when it includes a lifetime income rider or is annuitized for life. That guarantee is backed by the issuing insurance company, which is why carrier strength matters. Michael compares both the income amount and the financial strength of the carrier behind it.
Are annuities a good idea for everyone?
No. Annuities fit the portion of savings you want to turn into guaranteed income, not all of your money, and they carry surrender periods that limit access. Michael helps you decide how much should carry a guarantee and how much should stay liquid, rather than pushing everyone toward the same answer.
How are annuities taxed?
Annuities grow tax-deferred, so you do not pay tax on the growth until you take it out. How distributions are taxed depends on whether the annuity was funded with pre-tax or after-tax dollars. Michael walks through how this applies to your situation, though tax advice specific to your return should come from your tax professional.

Build Income You Cannot Outlive

Tell Michael how much income you want and when you want it to start, and he compares fixed annuities, indexed annuities and income riders so you can see how each one turns your savings into guaranteed income.

Call 561-234-8810