Annuities – The Basics

Annuities are an income-generating tool that blends an insurance contract with a financial product. Over a period or with a lump sum, you can purchase an annuity contract that guarantees an amount of income at regular intervals, sometimes for life. Depending on the annuity contract, you may be able to add additional features such as protection against certain risks such as long-term care costs or inflation. You may also be able to customize the underlying assets supporting the annuity. This means that instead of having a contract backed by treasury bonds or CDs, you can have an annuity backed by the stock market. In turn, the structure of your payouts and the risk profile of the investment changes depending on the type of annuity. But often, annuities are aimed at providing dependable income, no matter the underlying asset. As such, annuities can be a tool for generating a consistent, guaranteed income. However, these products can be complicated as well. There are many different options and customizable factors that can make them difficult to understand and can be costly, which is the main reason why annuities today can be a polarizing topic.

At Juniper, we offer indexing annuities, which is a specific type of annuity that can be a simple, fruitful addition and even a bedrock of your retirement income strategy. Here’s what you should know about them:


Indexing Annuities

Indexing annuities are designed to offer a unique blend of growth potential and downside protection. They provide a secure way to grow your savings, participate in market gains, and safeguard against market losses.

How Do Indexing Annuities Work?

Principal Protection: Your investment is protected from market downturns, unlike direct investments in the stock market where you could face the risk of losing your principal due to market volatility.

Earnings Potential

Earn interest based on the performance of a chosen market index. The earned interest usually has a cap or is a percentage of the market index gain When the index performs well, your annuity’s value can increase, allowing your money to potentially grow faster than traditional fixed-rate products.

Why Choose Indexing Annuities?

Retirement Income

Indexing annuities can be an excellent addition to your retirement income strategy. By providing a balance of growth potential and principal protection, they can contribute to a stable and secure retirement income stream.

Risk Management

If you are concerned about market volatility affecting your retirement savings but still want access to it, index annuities may offer a middle-ground solution. They provide a way to participate in market gains while ensuring that your principal remains safe from market downturns.

Tax Advantages

Like other annuities, indexing annuities may offer tax benefits. The growth of your investment is tax-deferred, meaning you won’t pay taxes on the gains until you begin making withdrawals. This feature can help your money grow faster over time.

*It’s also important to note that annuity payments are guaranteed based on the claims-paying ability of the issuing institution.

The Juniper Wealth Management Approach

We’ve only scratched the surface on the details of index annuities and how they might play a role in your retirement strategy. Our team will work closely with you to understand your needs and explain the features and benefits of indexing annuities clearly, ensuring you have a comprehensive understanding of the investment. This way, we can create a customized plan that suits you best, no matter if annuities are or aren’t part of that best plan for you.

If you’re interested in taking the next step with Juniper Wealth Management on your journey toward financial confidence, use the form to schedule a time for us to connect! We are conveniently located in the Scottsdale, Arizona area and look forward to meeting with you.