How do annuities work?

What is an annuity?

Typically, an annuity is one option of accumulating money prior to retirement, and eventually distributing money during retirement or at your death. 对于许多即将退休或即将退休的人来说，一个重要的问题是他们的钱不够用. A retirement annuity, sometimes referred to as a life annuity, is an insurance contract 无论你活多久，你所购买的东西都可以为你的生活提供收入, or for a specific time period. It’s your choice.

Why buy an annuity?

None of us know how long retirement is going to last. That means one of the biggest risks you face is outliving your money. During retirement, you’ll continue to face the basic costs of living, such as housing, groceries, utilities, healthcare and taxes. 把年金收入和社会保障福利结合起来, you can help ensure that these basic costs are covered.

How does an annuity work?

年金是年金持有人与发行年金的公司之间的一种契约. You buy the annuity, and the company pays you interest on the money. At a certain age, 你开始把钱取出来，只要你活着，你就可以收到付款. 一些年金类型可能有助于减少比退休收入更长寿的可能性.

Annuities and life insurance 因为大多数年金合同是由人寿pp王者电子官网公司签订的，所以经常在同一谈话中被提及. However, life insurance is intended to meet the needs of the beneficiaries after the death of the policyholder. 年金的目的是为pg电子官方网页版提供额外的收入 retirement years.

There are distinct phases of annuity contracts.

• Accumulation phase: 在您购买年金之后，在您开始收到付款之前的一段时间. During this phase, your investment will grow at a guaranteed or a variable rate of return, typically tax-deferred. 请记住，即时年金没有累积阶段, as payments begin right after a person purchases the product.
• Annuitization phase: When you start receiving payments, typically at retirement. This phase is also called annuity or payout phase. 根据您购买的年金产品，支付的金额和长度是不同的. 

Categories of annuities

There are various types of annuities including immediate, deferred, fixed and variable annuities. The immediate vs. deferred category has to do with when your income payout begins. The fixed vs. variable category has to do with how your contributions are invested.

Immediate annuity

Immediate annuities generate income immediately after purchase. Your money provides guaranteed payments to you that begin soon after you make your initial payment. 这取决于你的年金是否符合纳税条件, a portion or the entire payment can be included in your taxable income. The owner can elect to receive guaranteed payments for life, 或选择在指定的时间(某段时间)内付款.

Deferred annuity

递延年金允许您的投资在您决定在未来的某个时候开始收到收入支付之前实现税收递延增长. And you can choose when you want to start receiving income payments. Deferred annuities 对于那些正在寻找另一种方式为退休存钱的人来说，这也有意义, even when it is a few years down the road.

Fixed annuity

与可变年金一样，固定年金也需要考虑风险因素. pp王者电子官网公司接受投资风险，并将资金投入高质量的固定利率投资，如债券. 这使公司能够在一段时间内获得稳定的固定利率.

Variable annuity

With variable annuities, the risk is taken by the policyholder, 而不是pp王者电子官网公司，因为这些钱是基于市场的投资. This may include stocks, bonds, mutual funds or money markets. 你可以选择在不同的投资中转移资金. 此外，回报率可以根据投资的表现而变化.

Indexed annuity

Indexed annuities have both fixed and variable annuity features. 他们提供一个基本的保证利率以及一个基于利率的利率 stock market index, like the S&P® 500 Index. 当市场表现良好时，这为投资增长提供了机会. An indexed annuity can be a complex product. Consider discussing all the features, fees, 向你的pp王者电子官网代理人提出费用和任何税收罚款，这样你就能在购买之前了解它们是如何相互作用的.

Annuity payout options

When you purchase annuities, there are many payout options available. Here are some you can choose from:

• Life annuitization option. 有了这个选项，你将获得终身付款，金额是根据养老金领取者的预期寿命计算的. 
• Joint-life annuitization option. This option will allow your spouse to receive payments after you die. The payments are usually lower than the option above, 因为它是根据你和你配偶的预期寿命计算出来的.
• Period certain. The annuity is paid for the period of time you choose, and in the case that you die before the period ends, 您的受益人将收到所选期限的剩余款项.
• Life with guaranteed term. 有了这个选择，你将获得终身收入，并可以为你的受益人选择一个保证期限. In the case that you die before the guaranteed period, your beneficiaries will receive payments until that chosen term is over.
• Systematic withdrawals. 你决定支付金额和你想要支付的月数, depending on how much your account is. You may outlive your payments with this option.
• Lump sum payment. If you decide to take a lump sum payment, 您需要为年金的投资收益部分缴纳普通所得税.

Consider having a conversation with a financial professional 帮助你决定年金作为你退休计划的一部分是否有意义. If you'd like to talk about your retirement goals and learn more about annuities, your local State Farm® agent may be able to help.