What Is an Annuity?
An annuity is a legal agreement between a life insurance company and the contract holder. It can only be issued by a licensed life insurance company and sold by a licensed life agent.
If you are getting an annuity in your 70's you are likely wanting the funds immediately or in the near future. There are several types of annuities to consider to achieve your financial goals.
These begin paying out shortly after you make a lump-sum payment. They’re ideal if you want a set payment amount to start right away and prefer a predictable stream of payments. This type of annuity takes what you saved and pays you kind of like a paycheck.
These delay payouts until a future date, allowing your money to grow tax-deferred in the meantime. They may be useful if you don’t need the money right away but want to plan ahead. This type of annuity is also helpful in a similar way to how an immediate annuity provides the feel of a paycheck.
Fixed annuities offer guaranteed interest rates and predictable payout. Variable annuities fluctuate based on market performance and come with more risk and potential reward.
MYGAs are a type of fixed and often deferred annuity. With a guaranteed interest rate for a set period, they are often considered appealing for their simplicity, lack of fees, stability in payout, and CD-like structure without market exposure.
Annuities can offer peace of mind in retirement, especially for those seeking stability and less financial guesswork. Here are a few key benefits:
Related: Are Annuities a Good Investment for Retirement Planning?
While annuities can offer stability, they aren’t the right fit for everyone. Here are a few things to keep in mind:
Learn about the Mistakes to Avoid When Buying an Annuity
Now that you have a better understanding of how annuities work, along with their benefits and potential downsides, you’re probably trying to figure out if one is the right fit for you. Before deciding to buy an annuity, it’s important to ask yourself a few key questions:
These are just some of the questions to consider when purchasing an annuity. It’s always a good idea to talk to a professional who can assess your unique situation and help guide your decision.
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Buying an annuity in your 70s isn’t a one-size-fits-all decision. It’s important to weigh your options and consider what works best for your current and future financial goals. For those wanting stability and simplicity, products like MYGAs can offer a reliable and straightforward solution. However, each person's situation is unique, and what works for one individual might not be right for another.
If you’d like to discuss whether an annuity, such as a MYGA, is the right choice for you, reach out to talk to our team at Twin City Underwriters. We’re here to help guide you through your options and make the best decision for your future.
At Twin City Underwriters, we know that individualized attention to a client’s personal situation and needs are especially important, which is why we take the time to understand you and your financial goals. Contact us to schedule an appointment with one of our experienced insurance agents.
Are you ready to have a meaningful discussion about your financial needs? Call or email TCU today to set up a free, no-obligation appointment with one of our dedicated agents.
Call Twin City Underwriters to learn more: 651-488-0172 or 800-507-6778.