Investing in Annuities

Benefits of Investing in Annuities

When it comes to your retirement, careful planning may help you live it the way you choose. Annuities offer several benefits for investors who are saving for retirement, including tax-deferred retirement savings, a choice of fixed- or variable-guaranteed income for retirement, and investment flexibility. That's why many retirees choose to add the guaranteed income offered through annuities to the equity and fixed-income investments they may already have in their retirement portfolios.

However, annuities aren't suitable for every investor. Your Financial Advisor can help you determine whether investing in annuities would benefit your personal situation.

Creating retirement income with annuities
Types of annuities
When to consider annuities
Investing in annuities through Wells Fargo Advisors
What you need to know before you invest in a variable annuity

Creating Retirement Income With Annuities

As part of a balanced retirement income plan, annuities may be beneficial for you by creating an income stream during retirement. As you’re planning ahead for retirement, annuities offer a tax-deferred savings feature and the ability to grow your income base. If you’re already retired, annuities can generate an immediate income stream.

When you are ready to receive income from your annuity, you can choose to receive payments for the rest of your life or for the rest of your and your spouse's lives. Your Financial Advisor can explain the different income alternatives available.

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Types of Annuities

There are three main types of annuities that you may want to consider: immediate annuities, fixed annuities, and variable annuities.

  • Immediate annuities provide an immediate income stream for a specific period of time or for life.
  • Fixed annuities provide a guaranteed interest rate for a certain time period and usually have a minimum guarantee on the renewal rate.
  • Variable annuities provide income that can vary from payment to payment based on the performance of the underlying investments. They're designed to help offset the effects of market fluctuations. If you choose an income benefit along with your variable annuity, you can receive guaranteed retirement income for the remainder of your life. This is optional and comes at an additional cost.

Please note: All guarantees for annuities are based on the claims-paying ability of the insurance company.

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When to Consider Annuities

You may want to consider investing in annuities if you:

  • Are concerned about outliving your savings
  • Do not have a pension or other source of ongoing income to cover your expenses in retirement
  • Are interested in creating an ongoing and consistent income stream during retirement
  • Are already maximizing your contributions to your tax-advantaged retirement accounts and/or plans (e.g., IRA, 401[k], 403[b], or other employer-sponsored plan)
  • Are retired and need to create a guaranteed and immediate income stream

Your Financial Advisor can help you clarify your retirement income goals, which will help determine whether investing in an annuity makes sense for you.

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Investing in Annuities Through Wells Fargo Advisors

Wells Fargo Advisors offers many choices for annuities, all from well-known insurance companies selected through our stringent review process. We use rating agency reports and employ third-party research that provides regular updates on each carrier's financial strength. We also review the carrier's products, service capabilities, and reputation to provide our clients with access to the top-tier annuity providers in the industry.

Contact your Financial Advisor for more information about annuities and for help in determining whether investing in an annuity is right for your particular situation.

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What You Need to Know Before You Invest in a Variable Annuity

Before you purchase a variable annuity, you should know how it works. Your Financial Advisor will provide you with a prospectus, which contains important information about the annuity contract, including investment objectives, risks, fees and charges, investment options, death benefits, and payout options. You should read and consider the prospectus carefully before investing.

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