Annuity explainer

Video Duration: 1 minute 50 seconds

What to consider with your retirement plan: Elapsed time 0 seconds [00:00]

There’s a lot to consider when it comes to retirement planning. You might ask questions like: How can I protect my hard-earned retirement savings from market fluctuations? How can I cover basic expenses without a regular paycheck? Will I run out of money if I live a long time? If you’re looking for some peace of mind in retirement, an annuity could be a great option.

What’s an annuity: Elapsed time 20 seconds [00:20]

So, what’s an annuity? It’s an insurance product that helps protect you against the risk of outliving your money. Here’s how it works. When you buy an annuity, you enter a contract with an insurer. You give them money, in exchange, they promise to give the money back to you plus interest at a later date or in the form of a reliable income stream.

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Annuities come in two main forms: deferred and immediate.

Deferred annuities are great long-term savings options. They allow you to grow money tax-deferred with the option to turn into income later. Your money will either grow at a fixed rate or a market-based rate, depending on the annuity you choose. When it comes time to retire, you can take the money out in a lump sum or start receiving scheduled payouts.

Immediate annuities, sometimes called income annuities, work best if you’re close to retirement. They let you quickly turn some of your savings into a reliable income stream. When you buy an immediate annuity, you open with a lump sum and start receiving payouts shortly after. You can choose to get guaranteed‍ ‍¹ payouts for the rest of your life, a set number of years or both‍ ‍². You can also add beneficiaries to your contract. That way, you can rest easy knowing your family will be taken care of.

Schedule a call: Elapsed time 1 minute 40 seconds [01:40]

Ready to find out if an annuity is the right or you? Schedule a call with one of our Retirement Income Specialists.

Description of visual information: [1 Guarantees apply to certain insurance and annuity products and are subject to product terms, exclusions and limitations and the insurer's claims-paying ability and financial strength. 

2 Money not previously taxed is taxed as income when paid. Withdrawals before age 59½ may be subject to a 10% federal tax penalty.  

An annuity is a long-term insurance contract issued by an insurance company designed to provide a retirement income stream for life. Once the contract principal is converted into an income stream, you will no longer have access to your principal as a lump sum. Terms, conditions, limitations and surrender charges may apply.

Life insurance and annuities provided by USAA Life Insurance Company, San Antonio, TX and in New York by USAA Life Insurance Company of New York, Highland Falls, NY. All insurance products are subject to state availability, issue limitations and contractual terms and conditions. Each company has sole financial responsibility for its own products.] End of description.

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