Annuities & Retirement
Build guaranteed retirement income — and stop worrying about outliving your savings
People planning for retirement who want guaranteed, tax-advantaged income.
How annuities & retirement income work
Annuities are financial products issued by insurance companies that help you turn accumulated savings into a stream of income you can't outlive. In a world where traditional pensions have largely disappeared and Social Security alone rarely covers the full picture, an annuity can fill the gap by providing reliable, predictable income in retirement. Tax-deferred growth during the accumulation phase means your money compounds without an annual tax drag — and a variety of payout options let you tailor income to your specific retirement timeline.
How it works
You fund an annuity with a lump-sum payment or a series of contributions. During the accumulation phase, the funds grow on a tax-deferred basis. When you're ready to take income — the distribution or annuitization phase — you choose how payments are structured: for a set period, for your lifetime, or for the joint lifetimes of you and a spouse. Fixed annuities credit a guaranteed interest rate. Variable annuities tie returns to investment sub-accounts. Fixed-indexed annuities link growth to a market index with a floor protecting against loss. Each type has different tradeoffs in growth potential, guarantees, and fees.
Important: Annuities are financial products, not life insurance. They involve investment risk (on variable products), surrender charges, and tax implications. All annuity guarantees are backed by the financial strength and claims-paying ability of the issuing insurance carrier — not by any government program. This page is educational and is not financial, tax, or investment advice. Consult a qualified financial professional before purchasing an annuity. Products and features vary by carrier and state.
What annuities offer
- Tax-deferred growth — no annual tax on earnings during accumulation
- Guaranteed income options that cannot be outlived
- Principal protection available on fixed and fixed-indexed products
- Flexible payout structures (lifetime, joint-life, period-certain)
- Death benefit options to pass remaining value to beneficiaries
- No contribution limits like IRAs or 401(k)s
Features vary by carrier, product type, and state of issue. Annuity contracts are subject to carrier issue requirements and suitability review. Features listed are representative and may not be available on all products.
Ready to see what an annuity could do for your retirement income?
Because Sahlman is independent, we compare annuity options across multiple national carriers — and a licensed professional walks you through suitability before anything is recommended. The conversation is free and comes with zero commitment.
Annuities & Retirement — frequently asked
Are annuities the same as life insurance?
No. Life insurance pays a benefit when you die; an annuity is designed to pay you income while you're alive. Both are issued by insurance companies, but they serve opposite financial goals. Many people use both: life insurance to protect their family at death and annuities to protect their retirement income during life.
What are the tax implications of an annuity?
Annuities grow tax-deferred, but withdrawals are taxed as ordinary income (not capital gains). Withdrawals before age 59½ may be subject to a 10% IRS penalty in addition to income tax. This page is educational — consult a qualified tax professional for advice specific to your situation before purchasing an annuity.
Are there fees or surrender charges?
Many annuities have surrender periods — typically 5 to 10 years — during which early withdrawals trigger surrender charges. Variable annuities often carry additional investment management fees. Your agent will fully disclose all costs before you apply, and a licensed professional can help you compare products to find one that fits your timeline and goals.
Is an annuity right for me?
Annuities are best suited for people approaching or in retirement who want guaranteed income they can't outlive and are comfortable with a longer-term commitment. They are not appropriate for everyone. Because annuities are complex financial products, Sahlman Insurance Group strongly recommends consulting with a licensed financial professional before purchasing. We can connect you with the right resources.
Explore other ways we protect families
Every family's situation is different. Browse the other coverage options Sahlman Insurance Group offers.
Educational content only. This page provides general information about annuities & retirement and is not financial, tax, or legal advice. Annuity contracts are financial products, not insurance coverage; they are subject to carrier issue requirements, and product availability, features, and rates vary by state and carrier. Carrier names referenced on this site are representative; the Sahlman Insurance Group carrier lineup is subject to change. No contract is in force until issued by the carrier. Individual results vary.
Get a straight answer on annuities
A licensed Sahlman agent will walk you through how annuities work, whether one fits your retirement picture, and which carriers to consider — free, no-pressure, and on your schedule.
Prefer to talk first? Call (704) 312-8212