Annuities That Help You Retire with Confidence

Saving for retirement is only half the challenge. The other half is creating a reliable income stream that lasts throughout retirement.

Many retirees worry about running out of money, experiencing market downturns, or withdrawing too much from their investment accounts too early. Annuities can help address these concerns by providing principal protection, tax-deferred growth opportunities, and, depending on the product selected, the option for guaranteed lifetime income.

At DeFazio Insurance Brokerage, we help individuals, families, and retirees throughout Sacramento and California compare annuities from highly rated insurance companies. Whether you’re looking to protect your retirement savings, generate dependable income, or reduce market risk, we’ll help you understand your options and choose an annuity that aligns with your financial goals.

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What Is an Annuity?

An annuity is a financial contract between you and an insurance company. In exchange for a lump-sum payment or a series of contributions, the insurance company agrees to provide benefits according to the terms of the contract.

Depending on the type of annuity, those benefits may include:

Tax-deferred growth
Principal protection (for many fixed annuities)
Guaranteed interest rates
Lifetime income options
Protection from certain market losses
Death benefits for beneficiaries

Annuities are commonly used to supplement Social Security, pensions, and retirement savings.

Types of Annuities

There are several different types of annuities, and each serves a different purpose.

Fixed Annuities

Fixed annuities offer a guaranteed interest rate for a specified period.

Benefits may include:

Guaranteed principal protection
Predictable growth
No direct market exposure
Stable retirement savings

Fixed annuities are often attractive to conservative investors seeking safety and stability.

Fixed Indexed Annuities (FIA)

A Fixed Indexed Annuity allows your interest earnings to be linked to the performance of a market index, such as the S&P 500®, while keeping your principal protected from direct market losses.

Although your money is not invested directly in the stock market, the insurance company credits interest according to the terms of the contract, which may include participation rates, cap rates, spreads, and a minimum guaranteed floor.

Potential advantages include:

Tax-deferred growth
Principal protection
Opportunity for higher credited interest than traditional fixed annuities
Protection from negative market years (subject to contract terms)

Immediate Income Annuities

An immediate annuity is designed to begin making income payments shortly after it is purchased.

Many retirees use immediate annuities to create a predictable stream of retirement income that supplements Social Security or pension benefits.

Deferred Income Annuities

Deferred income annuities postpone income payments until a future date, allowing retirees to plan for future income needs later in retirement.

These products may help address concerns about longevity and outliving retirement savings.

Why Do People Buy Annuities?

Annuities are often used to help solve common retirement challenges.

Common goals include:

Creating guaranteed lifetime income
Protecting retirement savings
Reducing market risk
Diversifying retirement assets
Delaying taxes on growth
Leaving assets to beneficiaries
Supplementing Social Security income

For many retirees, an annuity provides greater confidence knowing that a portion of their retirement income is designed to continue regardless of market performance.

Tax Advantages of Annuities

One of the most attractive features of annuities is tax-deferred growth.

This means your earnings generally grow without current income taxation until withdrawals are made.

Potential benefits include:

Compounding without annual taxation on gains
Greater long-term growth potential
Flexible withdrawal strategies during retirement
Potentially lower taxable income before retirement

Withdrawals are generally taxed as ordinary income, and withdrawals before age 59½ may be subject to additional tax penalties unless an exception applies.

Because every individual’s tax situation is different, we recommend discussing tax questions with your accountant or tax advisor.

Are Annuities Safe?

Annuities are insurance products—not bank accounts or securities.

The guarantees offered by an annuity are backed by the financial strength and claims-paying ability of the issuing insurance company.

For that reason, choosing a financially strong insurance carrier is one of the most important parts of the process.

At DeFazio Insurance Brokerage, we work with highly rated insurance companies and help clients compare financial strength ratings, product features, surrender periods, income options, and long-term value.

Who Should Consider an Annuity?

Annuities may be appropriate for:

Individuals seeking dependable retirement income and reduced market volatility.

People approaching retirement who want to preserve accumulated assets while planning future income.

Individuals who prioritize principal protection over aggressive investment growth.

Business owners looking for additional tax-deferred retirement savings opportunities outside traditional qualified retirement plans.

Those who have received an inheritance, retirement rollover, settlement, or proceeds from the sale of a business may use an annuity as part of a broader retirement strategy.

Frequently Asked Questions

1. Are annuities invested in the stock market?

Fixed annuities are not invested in the stock market. Fixed Indexed Annuities credit interest based on the performance of a market index but do not directly invest your principal in the market.

2. Can I lose money?

Traditional fixed annuities generally provide principal protection, while fixed indexed annuities typically protect against direct market losses subject to the terms of the contract. However, withdrawals during surrender periods or certain fees may affect the value of your contract.

3. Are annuities good for retirement?

For many individuals, annuities can be an effective tool for creating guaranteed income and helping manage longevity risk. Whether an annuity is appropriate depends on your financial goals, time horizon, and overall retirement plan.

4. Can I leave my annuity to my children?

Many annuities include death benefit provisions that allow remaining contract value to pass to designated beneficiaries, subject to the terms of the contract.

Why Choose DeFazio Insurance Brokerage?

Not every annuity is created equal.

Insurance companies differ in:

Crediting strategies
Guaranteed interest rates
Income rider options
Surrender schedules
Death benefits
Withdrawal flexibility
Financial strength

As an independent brokerage, we compare products from multiple highly rated insurance companies so you can evaluate your options with confidence. Rather than promoting one company’s products, we focus on finding a solution that aligns with your retirement objectives, risk tolerance, and income needs.

We’ll explain every recommendation in plain English so you understand exactly how your annuity works before making a decision.

Build a More Confident Retirement

Retirement should be about enjoying life—not worrying about whether your savings will last.

Whether you’re looking for principal protection, tax-deferred growth, or guaranteed lifetime income, an annuity may play an important role in your retirement strategy.

Contact DeFazio Insurance Brokerage today to compare fixed annuities, fixed indexed annuities, and retirement income solutions. Together, we’ll build a strategy designed to help you protect what you’ve worked so hard to earn while creating greater financial confidence for the years ahead.

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