Annuities · NY · NJ · GA · NM
A paycheck that doesn't stop.
You spent forty years learning how to save. Nobody teaches you how to spend it down without running out. An annuity is one answer to that question, and it is worth understanding before anyone sells you one.
Free, no-obligation, no-pressure · Fixed & fixed indexed only · Se habla español
What is an annuity?
An annuity is a contract with an insurance company, built around one question: what if the money has to last longer than you planned?
The shape of it is simple. You hand over a lump sum, or you pay in over time. In exchange, the company contracts to pay you income, either for a set number of years or for the rest of your life. That second option is the part people care about, because it is one of the few financial tools that keeps paying no matter how long you live.
Every guarantee in that contract rests on one thing: the claims paying ability of the insurance company that issued it. It is not FDIC insured and it is not government backed. That is why the carrier's financial strength rating matters more here than in almost any other product.
An annuity is not about getting rich. It is about knowing what arrives, and when.
The two kinds worth knowing
There is a third kind, the variable annuity, which is a securities product. Jorge does not offer those, and this page does not cover them.
Fixed Annuity
The contract sets the interest rate, so you know exactly what it earns. The simplest version, and the easiest to compare between carriers. Closest thing to a CD in the insurance world.
Fixed Indexed Annuity
Crediting is tied to a market index. A floor limits what a down year can do to your indexed value, and a cap or participation rate limits how much of an up year you receive.
What You Give Up
Smoother results in exchange for some of the upside, plus a surrender period during which large withdrawals cost you. That trade is the entire product. Understand it or do not buy it.
The part most annuity pages leave out
Annuities get sold hard, and that has given them a mixed reputation. Some of that reputation is earned. Here is what to look at before you sign anything, from anyone.
- The surrender schedule. Most contracts limit how much you can withdraw for a set number of years. Ask how long, and what it costs to break it.
- Every fee, in writing. Optional riders, especially income riders, carry annual charges that reduce your value. They can be worth it. You should still see the number.
- The cap or participation rate, and whether it can change. On many contracts the carrier can adjust it after the first year.
- How much of your money is going in. Putting most of your savings into one long term contract is rarely suitable, no matter how good the contract is.
- Your emergency fund stays outside it. If you may need the money during the surrender period, this is the wrong tool.
- The carrier's financial strength rating. The guarantee is only as good as the company behind it.
If an agent will not walk you through the surrender schedule and the fees before you sign, that is your answer.
Who an annuity tends to fit
And who it usually does not.
Near or in Retirement
You have savings you will not touch for years, you already have an emergency fund, and what keeps you up at night is outliving the money rather than growing it faster.
You Want a Floor
You have watched a balance drop in a bad year and it changed how you sleep. Trading some upside for a floor is worth it to you, and you understand that is the trade.
You May Need the Money
You are still building an emergency fund, you have higher interest debt, or there is a real chance you will need a large withdrawal during the surrender period.
Annuities, answered
A floor protects your indexed value from market losses, but that is not the whole picture. Withdrawing more than the contract allows during the surrender period can trigger surrender charges, and optional riders carry fees that reduce value over time. Ask for the surrender schedule and every fee in writing.
Not in a fixed or fixed indexed annuity. Crediting is tied to how an index performs, but you do not own the index and you do not receive its dividends. That is why there is a floor, and also why there is a cap.
It depends entirely on how the contract and the payout option are set up. Some pay a remaining balance to your beneficiary, some stop at death, and some continue to a spouse. This is one of the most important decisions in the contract and it is easy to get wrong.
Growth is generally tax deferred until you withdraw it, and how withdrawals are taxed depends on whether the contract is qualified or non qualified, and on your own situation. Talk to a tax professional about your specific case before you decide.
No. There is no fee to have the conversation, and no obligation. If an annuity is not right for your situation, the honest answer is that it is not right, and you will hear it.
Ask the questions before you sign
Bring me a proposal someone else wrote and I will walk you through the surrender schedule, the fees, and the fine print, line by line. If it is a good contract, I will tell you. If it is not, I will tell you that too.
Talk It Through Call Jorge — (917) 943-2870Educational information for New York, New Jersey, Georgia, and New Mexico residents; not affiliated with any government program. This is a solicitation for insurance. Annuities are long term contracts issued by insurance companies. All guarantees are backed solely by the claims paying ability of the issuing insurance company and are not insured by the FDIC or any government agency. Fixed and fixed indexed annuities only; variable annuities are securities products and are not offered. Surrender charges, rider fees, caps, and participation rates vary by contract and carrier and may change. Product availability varies by state. This is not tax or legal advice; consult a qualified professional about your situation. Jorge Castillo · Joram Castle Group · NPN 4654668.