Grosjean & associates inc.

RETIREMENT /  EMPLOYEE BENEFIT Consulting

 

ANNUITIES


A PRIMER


Annuities have been used as a valuable planning tool to help many families convert excess recourses into an income stream.

Americans have placed over $1 Trillion in annuities to, in the broadest sense, so that there will be a stream of payments.

If the stream of payments back from the insurance company start right away then we have an immediate annuity.

If the payments are delayed until sometime in the future, we have a deferred annuity.

If the payments coming back from the insurance company are based on an assumed interest rate that the insurance company is earning, then we have a fixed annuity.

On the other hand, if the payments are based on the performance of an underlying investment pool, we have an index annuity.

You shouldn't make too much of an analogy, but fixed annuities look somewhat like a CD, while index annuities look somewhat like mutual funds.

Click on the button below for an example of how an index annuity compared with the stock market over a ten year time frame!