Questions? 1.800.239.0356

Back to Top
fixed annuities


Annuity Education: What Are Retirement Annuities?

Categories: Annuity Education, Immediate Annuities

When someone uses the term, Retirement Annuity, they are usually referring to a particular type of annuity product called a Single Premium Immediate Annuity (SPIA). For that reason, and for the purposes of this article, we will be using both terms interchangeably.

First of all, you should understand what a retirement annuity is. Retirement annuities are essentially, insurance for your retirement. What they insure and protect against is running out of income before the end of your life. In exchange for a premium deposit, an insurance company contractually guarantees to pay you a set income payment every month, quarter or year. Retirement annuities can be used to supplement your existing retirement income; whether that is Social Security, a pension, or distributions from a 401(k) or IRA.

Where retirement annuities really stand out, however, is that with a life payout option, you simply cannot outlive your payments. One of the biggest fears suffered by retirees today is outliving their savings. With a retirement annuity, you can depend on a safe, guaranteed and stable lifetime income, in addition to your Social Security and/or pension. It really is like creating your own private pension plan, structured in whatever way is most beneficial for your individual situation. Please watch this short video for additional details:

Retirement annuities can be purchased with non-qualified funds or tax qualified funds, such as those contained within an IRA account. When purchasing a retirement annuity with non-qualified funds, a portion of each payment received is considered a return of premium and is tax free, until your total premium deposit is recovered. The remainder of each payment is taxable as ordinary income in the year received.

AnnuityAdvantage offers a great deal of information and resources regarding a wide variety of fixed annuity products. Our website offers glossaries, a FAQ, as well as informational pages dedicated to explaining the intricacies of retirement annuities. A good place to continue further research would be to visit our Immediate Annuities page, which gives a detailed and more complete explanation of all the various options available when constructing your own retirement annuity. If you would like us to provide you with actual quotes from the top insurance companies in the country, please visit our Immediate Annuity Quote page.

Also, licensed Annuity Specialists are available by calling 1-800-239-0356. These Specialists can answer your question and explain annuity terms and conditions in detail, so you feel comfortable with whatever product you decide to purchase. Talk to an AnnuityAdvantage Specialist today and see how a retirement annuity can help you meet your retirement income needs. Our services are always FREE and you will never incur any type of sales charge, load or fee. We look forward to being helpful.