How Do Annuities Work?

Annuities are issued and sold by financial/Insurance institutions, which invest funds from individuals. After you’ve fully funded the annuity, the financial institution can issue you a stream of payments at a later date.

Annuities work with an accumulation phase and an annuitization phase. During the accumulation phase, you fund the annuity and don’t receive any payments. During the annuitization phase, you begin to receive regular payouts.

Questions About Annuities?

We’re here to help walk you through the different types of annuities and to analyze your unique financial situation to see if annuities may be the right fit for your retirement planning needs

Is An Annuity Right For You?

An annuity could be a great fit for you if you’re seeking a guaranteed, stable stream of income for your retirement. In addition, annuity owners can’t outlive their income stream, making it a very attractive product for retirees. However, there are a few negatives to annuities, particularly that the lump sum you put into the annuity is illiquid and subject to withdrawal penalties.

Iron Point Retirement Solutions can help you decide whether an annuity or another financial product is a better fit for your retirement income needs. We’re here to help you make informed, educated choices to support you throughout your retirement. So get started today by contacting us today!

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What Are The Different Types of Annuities?

Fixed & Fixed Indexed Annuities

These types of annuities generally have a guaranteed interest or crediting rate, along with indexed crediting strategies as well as a “floor” so they don’t lose value to market volatility.  They can also provide regular periodic payments to the owner. These type of annuities can be a fantastic tool for those planning for retirement and looking for safer payments that won’t have a rate that changes overtime (unlike the variable annuities). 

Variable Annuities

Variable annuities have more risk because they are directly tied to the market and do not have full protection against market correction, however they can have more financial gain and therefore can allow the owner to receive bigger payments if the annuity fund does well but smaller payments if the investments do poorly.

Immediate Annuities

Immediate annuities, also known as a SPIA (Single Premium Immediate Annuity) begin making payments immediately (30 days after you deposit a lump sum.) Unless you specifically request a later date.

Deferred Annuities

Deferred annuities can be set up for accumulation and/or have an income rider but they don’t begin payments until after your initial investment. Instead, they begin paying out at the age you specify that you would like to begin receiving payments

Disclaimer: Iron Point Retirement Solutions, LLC and its affiliates are not Certified Public Accountants (CPAs) or Certified Financial Planners (CFPs) and do not prepare tax returns, nor do they buy, sell, or advise on specific stocks/bonds/mutual funds clients should acquire or sell but do advise clients on how to build a more tax-efficient portfolio through various retirement strategies and advise clients on how they can utilize their portfolio using Safe Money Concepts.  Iron Point Retirement Solutions, LLC also helps individuals planning for programs such as Medicare, Social Security and other governmental agencies that we are not affiliated with. Individuals looking for more information about these governmental agencies should visit or for additional information