An annuity is a financial product sold by insurance companies that is designed to accept and grow funds from an individual and then, upon annuitization, pay out a stream of payments to the individual at a later point in time. Annuities are primarily used as a means of securing a steady cash-flow for an individual during their retirement years.  Steele Financial Services, LLC, identifies annuities as investment vehicles currently available in the retirement planning toolkit.  They come in many different forms and can require a great deal of research and understanding in order to select and manage the right ones.  This is the value proposition that Tom Steele offers his client base. 

Annuities can be structured according to a wide array of details and factors, such as the duration of time that payments from the annuity can be guaranteed to continue. Annuities can be created so that, upon annuitization, payments will continue so long as either the annuitant or their spouse is alive. Alternatively, annuities can be structured to pay out funds for a fixed amount of time, such as 20 years, regardless of how long the annuitant lives.

Annuities can also be structured to provide fixed periodic payments to the annuitant or variable payments. The different ways in which annuities can be structured provide individuals seeking annuities the flexibility to construct an annuity contract that will best meet their needs.

Although it is possible to have guaranteed income for life with a fixed annuity, there is no assurance that this income will keep up with inflation.  There is a surrender charge imposed generally during the first 5 to 7 years or during the rate guarantee period.

Index annuities are insurance contracts that, depending on the contract, may offer a guaranteed annual interest rate and some participation growth, if any, of a stock market index.  Such contracts have substantial variation in terms, costs of guarantees and features and may cap participation or returns in significant ways.  Any guarantees offered are backed by the financial strength of the insurance company, not an outside entity.  Investors are cautioned to carefully review an index annuity for its features, costs, risks and how the variables are calculated.

In addition to the fixed and indexed annuity options listed above, variable annuities may be utilized. Please contact Tom Steele to obtain a prospectus for a variable annuity product. The prospectus contains investment objectives, risks, fees, charges, expenses and other details regarding the variable annuity contract and the underlying investments, which should be considered carefully before investing.  

Call us to help you understand and manage the potential benefits offered by fixed, index, or variable annuities and how they might fit into your retirement plan. 

Guarantees are backed by the claims paying ability of the insurance company.


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