Should You Have an Annuity?

In today’s unpredictable markets, many investors want to protect what they’ve worked hard for—without missing out on growth. That’s where an annuity  can help.

When thoughtfully included as part of your overall financial plan, annuities can bring stability, guaranteed income, and long-term peace of mind.

What Is an Annuity?

An annuity is a contract with an insurance company designed to help you grow and protect your money. You can use it to build savings over time or to create a steady income stream in retirement.

It’s not a one-size-fits-all product—there are different types designed for different goals. Here is an overview of them:

Fixed & Indexed Annuities: Focused on Safety

These options protect your principal and provide predictable growth.

• Fixed annuities pay a guaranteed interest rate for a set period.
• Fixed Indexed annuities link potential growth to a market index (like the S&P 500) but still protect your original investment from market losses.

They’re ideal for investors who value stability and protection over chasing market highs.

Fixed Annuities are long term insurance contracts and there is a surrender charge imposed generally during the first 5 to 7 years that you own the annuity contract. Indexed 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. Investors are cautioned to carefully review an indexed annuity for its features, costs, risks, and how the variables are calculated. Any guarantees offered are backed by the financial strength of the insurance company. Surrender charges apply if not held to the end of the term. Withdrawals are taxed as ordinary income and, if taken prior to 59 ½, a 10% federal tax penalty.

Variable Annuities: Growth with Optional Protection

Variable annuities keep your money invested in the market through subaccounts, offering greater growth potential—but also more risk.

You can customize them with optional riders (add-on benefits) for:

• Lifetime income (a steady paycheck for life)
• Enhanced death benefits for your loved ones
• Long-term care or income protection options

These can be powerful tools for people who want market participation with a safety net.

Please consider the investment objectives, risks, charges, and expenses carefully before investing in Variable Annuities. The prospectus, which contains this and other information about the variable annuity contract and the underlying investment options, can be obtained from the insurance company or your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.

The investment return and principal value of the variable annuity investment options are not guaranteed. Variable annuity sub-accounts fluctuate with changes in market conditions. The principal may be worth more or less than the original amount invested when the annuity is surrendered.

Why Do People Choose Annuities?

• Income you can’t outlive (this is for FA’s and FIA’s not Variable)
• Tax-deferred growth on your earnings
• Protection from market downturns (depending on type)
• Customization for your goals and time horizon

However, annuities come with fees and rules around withdrawals—so it’s important to understand the details before you invest.

Our Approach at Boyce & Associates

We believe every annuity should have a clear purpose  in your financial plan—never as a “catch-all” product.

That’s why we partner with dozens of top-rated carriers, not just one, to find the best solution for your specific needs.

If you already own an annuity, it’s worth reviewing. Newer products often include better benefits and lower costs, and a professional review ensures your annuity still aligns with your goals.

Only a portion of your retirement savings should be used to purchase an annuity. You want most of your money growing inside your brokerage accounts. This is why we always demonstrate how this looks in your financial plan.

The Bottom Line

Annuities can offer balance, predictability, and lifetime income, but they’re most effective when used intentionally.

Knowing what you own and why you own it can make all the difference. You want to design these so you can access your income at the right time.

If you’d like to explore how an annuity might strengthen your retirement plan—or review one you already have—our team is here to help you make confident, informed decisions.