Annuities – The Basics
Annuities are an income-generating tool that blends an insurance contract with a financial product. Over a period of time 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.