The descent ยท Annuities
A tool for one specific job.
Turning part of a pile into a paycheck that keeps arriving.
Plainly
What an annuity is.
You hand an insurance company a sum of money. In exchange, the company contractually agrees to pay you income, either starting now or starting later, under terms written in the contract.
That's it. Everything else is variation on that trade: when payments start, how long they last, whether the balance can grow, and what happens to anything left over.
The trade you are making is flexibility for certainty. Money committed to an annuity is generally not money you can freely move. That is the cost, and it should be stated first, not buried.
Honest answers
The questions people actually ask.
Why do advisors push annuities?
Annuities are commission-based products, and the commission is paid by the insurance company rather than out of your deposit. That is how most insurance distribution works and you should know it going in. What matters is the order of operations: were you shown your own situation before you were shown a product, and can the trade-offs be explained plainly enough that you could repeat them back? Apply that test to us.
What's the downside?
Liquidity, mainly. Surrender periods can run years, and getting money out early can carry a charge. Some contracts are genuinely complicated. Fees and riders vary a lot between products. And any guarantee depends on the issuing company's ability to pay claims.
When is an annuity the wrong answer?
If you may need the money soon. If your guaranteed income already covers your essential expenses. If you don't understand the contract after it's been explained twice. If the only reason it's being suggested is that you have a large balance sitting somewhere.
Do I have to use all of my savings?
No, and in most situations you shouldn't. The usual question is what portion, if any, should cover the expenses that can't flex, leaving the rest invested for growth and access.
How we approach it
Situation first. Always.
We map what you need, when you need it, and what's already covered by Social Security and any pension. Only then does it make sense to ask whether a contract belongs in the picture, and how much of one.
If the answer is that you don't need an annuity, you'll hear that from us. It happens, and it costs us nothing to say so.
Product features, availability and terms vary by contract and by state. Nothing here describes any specific product, and nothing here is a recommendation. Any recommendation requires a full review of your situation.