Guaranteed Income
You Can't Outlive
Fixed and indexed annuities for wealth accumulation and lifetime income
What Are Annuities?
A simplified explanation of how annuities work
An annuity is a contract with an insurance company designed to provide guaranteed income, often for retirement. You contribute money (either as a lump sum or through regular payments), and in return, the insurance company guarantees to pay you income, either immediately or at a future date.
Think of it as "pension-like" income: predictable, guaranteed, and available for life. Annuities can help solve one of retirement's biggest challenges: longevity risk, the risk of outliving your money.
✅ When Annuities Make Sense
- •You want guaranteed lifetime income you can't outlive
- •You're concerned about market volatility in retirement
- •You've maxed out other retirement accounts (401k, IRA)
- •You want tax-deferred growth on savings
- •You're building a floor of guaranteed income (IncomeForever™ strategy)
❌ When They Don't Make Sense
- •You need immediate access to all your money (liquidity)
- •You're under age 50 with a long time horizon
- •You haven't built emergency savings yet
- •You're comfortable with market risk and want maximum growth
- •You're looking for a short-term investment (less than 5 years)
Common Myths Debunked
❌ MYTH
"Annuities are all bad"
✓ REALITY
Some annuities (variable annuities with high fees) are problematic. But simple, low-cost fixed and indexed annuities can be excellent tools for guaranteed income.
❌ MYTH
"The insurance company keeps your money when you die"
✓ REALITY
Most modern annuities have death benefit provisions that return remaining account value to your beneficiaries. You can also add joint life options so income continues to a spouse.
❌ MYTH
"Annuities have huge fees"
✓ REALITY
Fixed and indexed annuities have NO ongoing fees. Variable annuities can have high fees (which is why we typically don't recommend them). We focus on simple, low-cost products.
Types of Annuities We Recommend
We focus on simple, transparent products with proven track records
Fixed Annuities
Guaranteed interest rates for safety and security
How They Work
Fixed annuities work like a CD at a bank, but typically with higher interest ratesand tax-deferred growth. You contribute a lump sum, the insurance company guarantees a fixed interest rate for a set period (e.g., 3-10 years), and your money grows tax-deferred.
Example: $100,000 in a 5-year fixed annuity at 5.5% guaranteed grows to approximately $130,696 with no tax drag during accumulation.
When to Use Fixed Annuities
- ✓Safety and capital preservation are priorities
- ✓You want predictable, guaranteed growth
- ✓Tax-deferred growth is important
- ✓You're 5-10 years from needing the money
- ✓CD rates are too low, but you want safety
Fixed Indexed Annuities (FIAs)
Growth potential with downside protection
How Indexing Works
FIAs link your returns to a market index (like the S&P 500) but with a safety net. When the market goes up, you capture a portion of the gains (subject to caps or participation rates). When the market goes down, you lose nothing. Your principal is protected.
Example: S&P 500 up 15% → You might earn 8-10% (capped)
S&P 500 down 20% → You earn 0% (protected)
Key Terms Explained
- Participation Rate: The percentage of index gains you receive (e.g., 50% participation → if index up 10%, you earn 5%)
- Cap: Maximum interest you can earn in a year (e.g., 8% cap → if index up 15%, you still earn only 8%)
- Spread: A percentage subtracted from index gains (e.g., 3% spread → if index up 10%, you earn 7%)
- Guaranteed Minimum: Some FIAs guarantee a minimum return (e.g., 0.5%-1.0%) even if index is flat
✅ When to Use FIAs
- • You want market-linked growth without downside risk
- • You're 5-10+ years from retirement
- • You've lost money in market downturns before
- • You want tax-deferred accumulation
- • You're building the "foundation" of IncomeForever™
- • You want to balance safety with growth potential
Income Annuities
Turn your savings into guaranteed lifetime income
Immediate vs. Deferred
Immediate Income Annuities (SPIA)
You contribute a lump sum, and income payments begin within 12 months. Perfect for creating immediate retirement income.
Deferred Income Annuities (DIA)
You contribute now, but income starts in the future (e.g., 5-20 years). Allows for larger payouts since growth occurs before income begins.
Lifetime Income Riders
Many FIAs and fixed annuities offer guaranteed lifetime withdrawal benefits (GLWB)as optional riders. These riders allow you to:
- •Lock in a guaranteed income amount
- •Maintain access to account value
- •Continue income even if account value depletes
- •Pass remaining value to heirs at death
📈 Inflation Protection Options
Some income annuities offer cost-of-living adjustments (COLA) that increase your income by a fixed percentage (e.g., 2-3%) each year to help offset inflation. Trade-off: lower initial payout in exchange for growing income.
Our Carrier Partners
Independent access to top-rated insurance companies
A+ Rated
A Rated
A+ Rated
A+ Rated
A Rated
💡 Why Multiple Carriers Matter
Unlike captive agents who can only sell products from one company, we have access to multiple top-rated carriers. This allows us to:
- ✓Shop for the best rates and features
- ✓Match products to your specific needs
- ✓Provide unbiased recommendations
🏆 The Independent Advice Advantage
Our independence means we're never pressured to recommend a specific product or carrier. We evaluate financial strength, product features, pricing, and customer service to find the best fit for you.
All recommended carriers maintain A or A+ financial strength ratings from AM Best.
Annuities in the IncomeForever™ Strategy
How annuities combine with life insurance to create durable retirement income
The Foundation
Fixed indexed annuities (FIAs) provide the guaranteed income base in the IncomeForever™ strategy. This floor of income protects against market downturns and sequence of returns risk.
The Leverage
Indexed universal life (IUL) insurance provides tax-free growth and income that can be accessed when FIA income isn't enough, or when market returns are strong.
The Flexibility
Together, they create a dynamic income system that adapts to market conditions, inflation, and your changing needs throughout retirement.
Sequence of Returns Protection
One of the biggest risks in retirement is the sequence of returns risk, the risk that poor market returns in the early years of retirement permanently damage your nest egg. Annuities protect against this by guaranteeing income regardless of market performance.
❌ Without Annuity Protection
A retiree forced to withdraw from a declining portfolio during early retirement years faces permanent depletion. Example: $1M portfolio down 40% → $600k, then withdrawing $50k/year → spiral toward zero.
✅ With Annuity Protection
Guaranteed annuity income covers base expenses regardless of market performance. Portfolio withdrawals can be paused during downturns, allowing recovery. This "income floor" prevents forced selling at the worst time.
Fee Transparency
Clear disclosure of how annuities are compensated
💰 Commission Disclosure
We believe in full transparency: when you purchase an annuity, the insurance company pays us a one-time commission (typically 3-7% of your contribution). This commission comes from the insurance company's reserves, not from your account value.
Example: You invest $100,000 in an annuity. Your account is credited with the full $100,000. The insurance company pays us (for example) $5,000 from their reserves. You pay $0 out of pocket.
✅ No Ongoing Fees
Unlike variable annuities (which often have annual fees of 2-4%), fixed and indexed annuities have zero ongoing management fees. Your money grows tax-deferred with no drag from annual expenses.
⏳ Surrender Periods Explained
Most annuities have surrender periods (typically 5-10 years) during which early withdrawals may incur a penalty. This penalty decreases each year and eventually disappears.
Typical Surrender Schedule:
Year 1
8%
Year 3
6%
Year 5
4%
Year 7
2%
Year 10+
0%
Note: Most annuities allow penalty-free withdrawals of 10% of account value per year, even during the surrender period.
💧 Liquidity Access Explained
Most annuities we offer provide access to 10% of your cash value per year, if needed. We advise, and plan against accessing cash value of growth or income annuities, but in an emergency it's nice to know you can.
Our Commitment to You
We only recommend annuities when they're truly in your best interest, not because of commissions. If an annuity isn't the right fit, we'll tell you. Our reputation and long-term relationships with clients are more valuable than any one-time commission.
BrightAdvisor finds 'best in class' accelerated growth, Increasing Income annuities that provide lifelong guaranteed income for both you and your spouse.
Annuities vs. Other Investments
When annuities win, and when they don't
| Feature | Annuities (FIA) | Stocks/Bonds | CDs/Savings |
|---|---|---|---|
| Principal Protection | ✓ | ✗ | ✓ |
| Growth Potential | Moderate (5-8%) | High (8-12%+) | Low (3-5%) |
| Tax-Deferred Growth | ✓ | ✗ (taxable) | ✗ (taxable) |
| Guaranteed Income Option | ✓ | ✗ | ✗ |
| Liquidity | 10%/year penalty-free | Full liquidity | Full liquidity |
| Market Risk | None (0% floor) | High | None (FDIC) |
| Best For | Safe growth + income | Long-term growth | Short-term safety |
✅ Annuities Win When...
- •You need guaranteed lifetime income
- •You want downside protection (0% floor)
- •You've maxed out other retirement accounts
- •Tax-deferred growth is a priority
- •You're building IncomeForever™ strategy
❌ Other Investments Win When...
- •You need maximum liquidity (full access anytime)
- •You have a 20+ year time horizon
- •You're comfortable with market volatility
- •You want maximum growth potential
- •You need emergency fund access (use savings/CDs)
Ready to Explore Annuities?
Get a personalized annuity income analysis to see how guaranteed income can fit into your retirement plan.