An annuity can turn part of your savings into protected growth or predictable income. It can also restrict liquidity and create a new surrender period. We help you examine both sides before you move money.
You place money with an insurance company in exchange for contractually defined benefits. Depending on the contract, those benefits may include principal protection from direct market loss, tax-deferred accumulation, a guaranteed income option, or a death benefit. The right question is not “Are annuities good?” It is “Does this specific contract solve a documented need better than the available alternatives?”
Power Financial focuses on insurance products for which its agents are appropriately licensed. Securities and investment-advisory services require a separate appropriately registered professional and agreement.
| Type | How growth works | Market exposure | Important tradeoff |
|---|---|---|---|
| Fixed annuity | Declared interest rate for a stated period. | No direct market participation. | Rate and liquidity depend on contract terms. |
| Fixed indexed annuity | Interest may be credited using an external index and a formula. | Not invested directly in the index. | Caps, participation rates, spreads, and crediting methods limit upside. |
| Income annuity | Premium is converted into a defined income stream. | Payments rely on insurer guarantees. | Income choices can reduce liquidity or access to principal. |
| Variable annuity | Value varies with selected investment options. | Direct investment risk is present. | A security requiring appropriately licensed securities professionals; Power Financial insurance agents do not independently offer securities. |
Compare liquidity, surrender value, income base versus cash value, rider charges, death benefit, inflation risk, insurer strength, tax treatment, and what happens if circumstances change.
A suitability review should consider more than age and account balance. We look at the role the money must play and whether the contract can realistically perform that role.
Income, accumulation, legacy, emergency access, or a combination? Money cannot be optimized for every purpose simultaneously.
We distinguish near-term liquidity from assets genuinely available for a long-term insurance contract.
Guarantees must be located in the contract—not inferred from an illustration or marketing phrase.
Existing benefits, market upside, flexibility, lower expenses, or a shorter commitment may be valuable alternatives.
Annuity guarantees rely on the issuing insurer’s financial strength and claims-paying ability, not the FDIC.
Tax consequences, retirement-plan protections, investment choices, costs, and services should all be evaluated before moving qualified assets.
It depends on the contract. Fixed and fixed indexed annuities can protect against direct market loss but may still impose surrender charges, market value adjustments, withdrawals, rider costs, or other reductions described in the contract.
No. A contractual income benefit may be guaranteed when its conditions are met. Illustrated accumulation, indexed interest, bonuses, and non-guaranteed values are different from guaranteed income.
Generally no. Growth is commonly tax-deferred, and taxable distributions are usually ordinary income. Qualified retirement money is already tax-deferred before entering an annuity.
Agents are generally compensated by the issuing insurer. Compensation varies by contract and may create conflicts. We encourage clients to ask for an explanation before purchasing or replacing a product.
Start with a conversation about your retirement timeline, current accounts, income goals, liquidity, and what prompted you to explore an annuity now.