Annuities

Protect your future with annuities that offer predictable payouts and long-term financial security.

Understanding Annuities

Annuities are financial products offered by insurance companies that can help provide a predictable source of retirement income. They can be funded with a lump sum or through contributions over time, depending on the product.



Different annuities are designed for different goals, from generating income now to accumulating funds for the future.

Types of Annuities

Several types of annuities are available, each offering different features:



  • Fixed: Provides a guaranteed interest rate for a specified period.
  • Indexed: Interest is linked in part to the performance of a market index, subject to the contract's terms.
  • Variable: Returns fluctuate based on selected investment options and involve greater market risk.
  • Immediate: Designed to begin providing income relatively soon after purchase.
  • Deferred: Allows funds to accumulate before income payments begin.


Choosing the Right Annuity

The right annuity depends on your retirement goals, timeline, and financial situation. Important factors to consider include:


  • Income Needs: When and how much income you may need
  • Payout Options: Temporary or lifetime income options
  • Costs: Fees, expenses, and potential surrender charges
  • Taxes: Tax-deferred growth and taxation of withdrawals
  • Risk: The level of guarantees and market exposure

When an Annuity Makes Sense

An annuity may be worth considering if you’re approaching retirement, looking for an additional source of predictable income, or planning ahead for future retirement needs.

Because annuities vary considerably in features, costs, and guarantees, Compass Health and Wealth can help you compare your options and determine how an annuity may fit into your overall retirement strategy.

Annuities Frequently Asked Questions

  • What exactly is an annuity?

    An annuity is a financial product issued by an insurance company that provides guaranteed income, either right away or in the future. It can help supplement Social Security and other retirement savings.

  • Are annuities a safe investment?

    Fixed annuities offer guaranteed interest and predictable payments, making them low-risk. Variable and indexed annuities come with higher risk but also the potential for higher returns. Your risk level depends on the type you select.

  • At what age can I access the money in an annuity?

    You can technically access money from an annuity at any age, but withdrawals made before age 59½ may come with a 10% IRS penalty on earnings, along with income taxes. After age 59½, you can take withdrawals without the IRS penalty, and you’ll start receiving income based on your annuity contract — right away with an immediate annuity or later with a deferred annuity. Many annuities also have surrender charges during the early years of the contract, regardless of your age. 

  • Are annuity payments taxable?

    Earnings inside an annuity grow tax-deferred, but withdrawals are generally taxed as ordinary income. The exact amount depends on how the annuity was funded.

  • Do I have to pay fees for an annuity?

    Sometimes, in particular for variable and indexed annuities. Fees may include administrative charges, investment management fees, and costs for optional riders. We can help walk you through your options, including the fee structure, before you purchase a plan.