Annuities feature a variety of investment and payout options and are an effective income supplement to Social Security, pension and retirement plan distributions.

An annuity has two phases: accumulation and payout. During accumulation, you make payments in exchange for a tax-deferred return. At payout, the value of your annuity converts to an income lasting a certain period—or your lifetime.

There are three types of annuities:

• An immediate annuity can help you turn a lump sum of money into guaranteed income for your lifetime, regardless of how long you live.  Depending upon the options you select, they also have the potential to help keep pace with inflation

• A fixed annuity guarantees a fixed interest rate which provides for guaranteed growth of your money while it accumulates.

• A variable annuity combines tax-deferred growth of earnings with potential income and capital appreciation of your subaccounts. 

How you’ll benefit
Each type of annuity offers unique benefits. But all share the following advantages:

• Lifetime income: Annuities provide income for various durations of time, including your entire life.

• Death benefit: Upon your death, your beneficiary receives the greater of either: the cash value of the money in your account or a guaranteed minimum (i.e. all premium payments minus partial surrenders). There may be additional charges for optional death benefits.

• Tax-deferred growth: Earnings on annuities accumulate tax-deferred, meaning you don’t pay taxes until you withdraw. When you take a withdrawal, your earnings get taxed at normal income tax rates.

When to consider
Different types of annuities may be more appropriate for certain life or financial situations. For example:

• An immediate annuity is useful if you are in need of a guaranteed stream of income that could potentially help you from outliving your assets.

• If you’re seeking a fixed rate of interest, consider a fixed annuity.

• A variable annuity is a good option if you are looking to build retirement security in a tax-advantaged way while having access to a variety of investment options.

Take the next step
Contact a Thrivent Financial representative today to learn how which type of annuity will help meet your retirement planning strategy.