What is an Annuity?

Annuities Can Provide Secure, Reliable Retirement Income

If you’re looking for a steady and secure retirement income, annuities are one option that can help enhance your financial plan while providing a vital measure of stability and safety. Because of their guarantees, annuities are often considered a safer investment compared to other retirement options.

How Annuities Work

Functioning similarly to Social Security, annuities are offered through private insurers rather than the government. Their strength lies in their guarantees, which are backed by the insurer’s financial stability, underscoring the importance of choosing a well-established insurance company.

Investing in Annuities

You can initiate an annuity investment by making a one-time lump sum payment or through regular payments over time. Annuities are a good option for large investments, and they’re ideal for those looking to defer taxes, secure a guaranteed return and enjoy flexible payout options.

Understanding the terms and conditions laid out in your annuity contract is crucial, as all investments carry risks, including the potential loss of principal.

Receiving payments from annuities

Annuities offer two types of payment plans:

• Immediate annuities start paying out soon after investment, usually within 30 days and are suitable for retirees who need immediate income.
• Deferred annuities are used as a way to accumulate funds for retirement because they earn additional money through guaranteed interest rates in safe, guaranteed contracts.

Annuities can play a crucial role in a comprehensive retirement strategy. They should be selected with professional advice to ensure they align with your personal financial goals and retirement plans.

*Annuities are long-term investments designed for retirement purposes. Distributions are subject to income tax, and if taken before age 59½, a 10% federal tax penalty may apply. The annuity may be subject to lengthy surrender periods and early withdrawals subject to surrender charges. Guarantees are backed by the claims-paying ability of the issuer.

Registered representatives offer securities through Mutual of Omaha Investor Services, Inc. Member FINRA/SIPC. Investment advisor representatives offer advisory services through Mutual of Omaha Investor Services, Inc.

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