What Is an Annuity?
Think of an annuity like a tool in your financial portfolio.
You put money into it today so it can help you later in life — either by growing safely over time or by creating a paycheck you can’t outlive.
People use annuities because they want:
- More confidence about retirement
- Protection from running out of money
- Growth opportunities
- Guaranteed income
- A way to create a financial plan that feels more predictable
Some annuities focus more on growth.
Some focus more on income.
Some can do a little of both.
The key is choosing the right strategy for your goals.
How Annuities Can Help
Growth
Some annuities are designed to help your money grow over time while protecting part or all of your principal from market losses.
This can be attractive for people who:
Want safer alternatives to traditional investing
Are nearing retirement
Don’t want to risk losing everything during market downturns
Income
Other annuities are built to create guaranteed income streams.
Think of it like creating your own pension.
You can receive income:
For a certain number of years
For life
Or even for both spouses
This can help cover:
Monthly bills
Retirement expenses
Healthcare costs
Peace of mind
* Guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company.
The 4 Main Types of Annuities
SPIA — Single Premium Immediate Annuity
“A Contract for Income”
This type is designed mainly for income.
You place money into the annuity, and it begins paying you income — often right away or very soon after.
People often use SPIAs when they want:
Reliable monthly income
Pension-style payments
Simplicity and predictability
Best for: Turning savings into dependable retirement income.
If deferred, it can also be referred to as a Deferred Income Annuity.
MYGA — Multi-Year Guaranteed Annuity
“Similar to a CD — Only Through an Insurance Company”
A MYGA offers a guaranteed interest rate for a set number of years.
It’s often used by people who want:
Safety
Predictable growth
Protection from market volatility
Unlike bank CDs, many MYGAs can offer competitive rates and tax-deferred growth.
Best for: Conservative savers looking for steady growth.
MYGIA — Multi-Year Guaranteed Indexed Annuity
“A Hybrid Approach between a MYGA and Fixed Index Annuity”
Fixed Indexed Annuities combine features from a MYGA giving a guaranteed interest rate and term.
Also gives an either / or approach to a market linked strategy. So if the market linked strategy performs better than the fixed rate offered, you would earn the higher of the two.
If the market linked strategy does not perform, you earn the guaranteed interest rate offered.
Variable Annuities
“More Market Exposure = More Risk and Potential Reward”
Variable annuities are connected to market investments.
That means:
Your value can go up
But it can also go down
They may offer stronger long-term growth potential, but they also carry more risk.
Best for: Investors comfortable with market fluctuations who want growth opportunities.
FIA — Fixed Indexed Annuities
“A Hybrid Approach”
Fixed Indexed Annuities combine features from multiple types of annuities.
They can be used for Income or for Growth
Some have fees and some do not
They are often designed to:
Help protect against market losses
Offer growth tied to market indexes
Create future income options
Many people like FIAs because they provide balance between safety, growth potential, and retirement income planning.
Best for: People who want more growth opportunities with a level of protection.
There Is No “One Size Fits All”
The right annuity depends on:
Your age
Retirement goals
Risk comfort level
Income needs
Family and legacy plans
That’s why working with someone who can access multiple companies and strategies matters.
I help clients compare options across the marketplace to find solutions designed around their goals — not a one-size-fits-all product.
Because retirement planning should feel personal, clear, and empowering.
Roots & Wealth Group
a subsidiary of SJA Financial Services, LLC
CA Lic. 4374774 | NPN 20996862
Phone: 707-WEALTH7 | 707-932-5847
Email: [email protected]
Address: Saint Augustine FL 32092
* Guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. Annuities are long-term financial vehicles designed for retirement purposes. These products contain limitations, including withdrawal charges, fees, and a market value adjustment, which may affect contract values.
This information is for educational purposes only and should not be construed as investment, tax, or legal advice. Please consult with your financial professional before making any financial decisions.
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