Which Is Right for Your Retirement, Growth or Income Annuity?
Annuities are a type of insurance product that can provide a guaranteed income stream in retirement. There are two main types of annuities: income annuities and growth annuities.
Income annuities provide a fixed stream of income for life. The amount of income you receive will depend on the amount of money you invest in the annuity and the annuity’s interest rate. Income annuities can be a good option for people who want to ensure that they have a steady stream of income in retirement.
Growth annuities offer the potential for growth, but there is no guarantee. The amount of money you receive in retirement will depend on the performance of the underlying investments. Growth annuities can be a good option for people who want to grow their retirement savings and are willing to take on some risk.
Here is a table that summarizes the key differences between income annuities and growth annuities:
|Guaranteed income for life
|Potential for growth
|No growth potential
|Potential for growth
Here are some of the benefits of income annuities:
- Guaranteed income: Income annuities provide a guaranteed income stream for life. This can provide peace of mind for retirees who are worried about outliving their savings.
- Tax-deferred growth: The growth of income annuities is tax-deferred, which can help you save on taxes.
- Flexibility: Income annuities can be flexible. You can choose to receive your income monthly, quarterly, or annually. You can also choose to defer your income for a certain period of time.
Here are some of the benefits of growth annuities:
- Potential for growth: Growth annuities have the potential to grow your retirement savings. This can help you reach your retirement goals.
- Flexibility: Growth annuities can be flexible. You can choose to invest your money in a variety of different investment options. You can also choose to take your money out of the annuity early, if needed.
Which type of annuity is right for you?
The best type of annuity for you will depend on your individual needs and goals. If you are looking for a guaranteed income stream in retirement, then an income annuity may be a good option for you. If you are willing to take on some risk and want the potential for your retirement savings to grow, then a growth annuity may be a good option for you.
It is important to speak with a Retirement Risk Advisor to determine which type of annuity is right for you. We can help you assess your individual needs and goals and recommend the best annuity for you!