Never Outlive Your Savings
Annuities provide the one thing every retiree needs — guaranteed income that lasts as long as you do. Learn how they work and whether they belong in your retirement plan.
The Biggest Risk in Retirement Is Living Longer Than Your Money
Americans are living longer than ever. A 65-year-old today has a 50% chance of living past 85 and a 25% chance of reaching 95. That means your retirement savings need to last 20 to 30 years — or more.
Social Security replaces only about 40% of your pre-retirement income. Market downturns, inflation, and unexpected healthcare costs can erode your savings faster than you planned. Annuities solve this problem by converting your savings into guaranteed income that cannot run out.
Whether you are 10 years from retirement or already there, understanding annuities gives you a powerful tool for financial security in your later years.
Types of Annuities Explained
Not all annuities are the same. Each type serves a different purpose depending on your timeline, risk tolerance, and income goals.
Fixed Annuities
Offer a guaranteed interest rate for a set period, similar to a CD but with tax-deferred growth. Your principal is protected and your returns are predictable. Fixed annuities are the most conservative option, ideal for risk-averse retirees who want stability above all else.
Best for: Conservative investors, people nearing retirement, those who want guaranteed returns
Variable Annuities
Allow you to invest your premiums in sub-accounts similar to mutual funds. Your returns fluctuate based on market performance, offering higher growth potential but also greater risk. Many variable annuities include optional riders for guaranteed minimum income or death benefits.
Best for: Investors comfortable with market risk, those seeking higher growth potential, people with longer time horizons
Immediate Annuities
You pay a lump sum and begin receiving income payments within 12 months — often within 30 days. The insurance company calculates your payment based on the amount invested, your age, and current interest rates. Once annuitized, the payments are guaranteed for life or for a set period.
Best for: Retirees who need income now, people who have just received a lump sum (inheritance, 401k rollover)
Deferred Annuities
Delay income payments to a future date while your money grows tax-deferred. During the accumulation phase, you can make additional contributions. When you are ready, you convert the annuity to income payments. The longer you defer, the larger your eventual payments will be.
Best for: People still working, those planning for future retirement income, anyone wanting tax-deferred growth
How Annuities Work: Two Phases
Accumulation Phase
You pay premiums into the annuity — either a single lump sum or regular payments over time. During this phase, your money grows tax-deferred. You do not pay taxes on gains until you start withdrawals. This tax advantage allows your money to compound faster than in a standard taxable investment account.
Payout Phase
When you are ready, you annuitize the contract and begin receiving regular income payments. You can choose payments for life, for a set period, or for the lives of both you and your spouse. The amount you receive depends on how much you invested, how long your money grew, your age, and current interest rates.
What Our Clients Say
I was terrified of running out of money in retirement. AEG helped me set up an annuity that guarantees income for the rest of my life. That fear is gone now.
Patricia W.
Retired teacher, Nashville TN
The IRA vs annuity question had me paralyzed for years. AEG's advisors showed me how to use both strategically. My retirement plan has never been stronger.
Thomas H.
Engineer, Seattle WA
After my husband passed, I had no idea what to do with his 401k. AEG guided me through the annuity options and I now have predictable monthly income I can count on.
Maria G.
Widow, Miami FL
Explore Annuity Topics
What Happens When an Annuity Matures?
Read more →Can You Transfer an Annuity?
Read more →What Happens to an Annuity When You Die?
Read more →Are Annuities FDIC Insured?
Read more →Qualified vs Non-Qualified Annuities
Read more →Annuity Loans Explained
Read more →Immediate vs Deferred Annuity
Read more →IRA vs Annuity
Read more →Insurance Replacement Disclosure (Overview)
Read more →Frequently Asked Questions
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