How to Use an Annuity

Family talking about how to use an annuity

Are you afraid of outliving your savings? Would you like to add another source of income in retirement? If so, an annuity might be right for you.

So what is an annuity? An annuity is a lump sum investment that provides a steady income for a fixed period or life. Annuities grow at either a fixed or varying rate and can either be paid immediately or deferred to a later date. Annuities can often add an extra layer of financial security to a retirement plan.

Annuities and retirement
Do you have an existing retirement account you are no longer putting money into? Since you can’t access that money until age 59 without a penalty, another option is to roll the money into another account. You can roll it into another 401k or IRA account, or you can put it into an annuity.

This is especially useful if you intend to retire early. You can invest money into an annuity before you are eligible to withdraw from your retirement account and/or collect social security. This would in turn give you steady payments.

Annuities can be a good option during retirement if you are worried that your current savings aren’t enough. By putting a lump sum of money into an annuity, you can guarantee income once your retirement funds are used up. You could defer the annuity to a set date, like your 75th birthday, or choose to begin receiving payments immediately.

Annuities should not be used as your only retirement strategy, but can be helpful in giving you some financial peace of mind. There are numerous types of annuities, so be sure to do your research or speak with an agent/producer to ensure you are getting the policy that best suits your needs.

Registered Representatives offer securities and Investment Advisor Representatives offer advisory services through Mutual of Omaha Investor Services, Inc. Member FINRA/SIPC.

Item #322260

Related Articles


How to Avoid the Pitfalls of These Common Budgeting Tips

Overspending is easy to do. Almost 64 percent of Americans have experience with credit card debt.1 You’ve heard many money savings tactics before, but are you aware of the potential pitfalls? Here are some common budgeting tips, and how you can avoid the unintentional downsides that might come with each. Tip 1: Making a budget First and foremost, you should make a budget to help kickstart […]

Read Article


How to Leave a Financial Legacy When You Aren’t Wealthy

Regardless of age, there’s a lot to think about with retiring or leaving your loved ones with some financial peace of mind. You’ll see articles about how you should save $1 million for retirement. Some professionals say you should leave your children with a certain amount money. Others advise on how to catch up in retirement savings. While this is all worth considering, it can be hard to gather enough information. Almost 57 percent […]

Read Article


Get Ahead: Free Financial Planning Tools for Retirement

Maybe you’ve been saving for retirement for years, or maybe you’re just getting started! Use these free financial planning tools to help you get ahead with your retirement planning. Get Ready for Retirement Calculators You may be surprised by how much you’re able to save for retirement by tucking a small percentage of your paycheck away each month. These […]

Read Article