Annuities & Retirement
You built it for a reason. Now give every dollar a job.
Retirement income. Protection. Growth. Liquidity. Legacy. Understanding what you want your money to accomplish is the first step toward understanding which financial tools deserve a place in the conversation.
Start with the person
What are you asking
your money to do?
The better question usually comes before the product. Choose a goal below to explore the questions that may matter.
What portion of your money needs stability? What risks are you trying to reduce? How much access to that money do you still need? Protection, liquidity and growth are related—but they are not the same job.
Financial Stage
Your financial life changes.
So can the job.
Every dollar doesn’t need the same job.
Annuities in Plain English
So what exactly is an annuity?
At its core, an annuity is a contract with an insurance company. Depending on the contract, it may be designed around accumulation, future income, immediate income or other contractual benefits.
The details matter. Before evaluating features, it helps to understand the basic parts of the contract.
Holds contractual rights under the policy.
The life used for certain contractual calculations or benefits.
Receives applicable death proceeds according to the contract.
Money paid into the annuity contract.
Value determined according to the contract’s terms.
A period when withdrawals above permitted amounts may trigger contractual charges.
The Annuity Family
Different words describe different things.
Fixed Annuities
Generally designed to credit interest according to rates and guarantees established under the insurance contract.
Fixed Indexed Annuities
Interest credits may be linked in part to the performance of a market index through contractual crediting formulas. The contract owner does not directly own the underlying index.
Immediate / Income Annuities
Designed primarily to begin generating contractual income relatively soon after purchase.
Deferred Annuities
Designed for an accumulation or waiting period before income or other payout features begin.
Important distinction: “Fixed” and “indexed” describe how value or interest may be determined. “Immediate” and “deferred” primarily describe timing.
Indexed Annuity Lab
The index went up. What happens next?
A market index may be one part of the formula used to determine interest credits. The published return of the index is not necessarily the interest credited to the contract.
What is a participation rate?
A participation rate determines how much of an index change is considered in the interest-crediting calculation under an applicable strategy.
What is a cap?
A cap can limit the amount of index-linked interest credited under a particular strategy.
What is a spread or margin?
Some strategies subtract a stated amount from the index change before determining credited interest.
Understand Before You Buy
20% Bonus?
Ask the next question.
An advertised premium bonus cannot be evaluated in isolation. It belongs inside the economics and rules of the entire contract.
One attractive number doesn’t explain an entire contract.
Liquidity Lab
Contract value and accessible cash are not always the same question.
The exact answer comes from the actual contract. That is why reviewing what you already own can be more useful than relying on a generic description.
Retirement Risk
Which risk are we talking about?
Retirement does not create one single financial risk. Different risks require different questions—and sometimes different tools.
Retirement Income
One day, the paycheck stops. The expenses don’t.
Retirement income planning starts by understanding which expenses are predictable, which are discretionary and which would still need to be covered during difficult markets.
Question worth asking:
Which expenses would you want covered even if markets had a bad year?
Income Lab
Income can be structured in different ways.
Common Statements
You’ve probably heard both.
More Than You Realized
The contract may involve more than
accumulation or income.
Beneficiary provisions
Different contracts can contain different death-benefit and beneficiary provisions.
Tax deferral
Tax deferral generally postpones taxation on applicable earnings until distribution; it does not mean tax-free.
Qualified vs. non-qualified money
The source and tax status of the money can affect how an annuity is treated and how future distributions are taxed.
Required distributions
Required distribution rules may depend on the retirement account or tax structure holding the annuity.
Health-related benefit features
Some contracts may contain waiver or rider provisions tied to qualifying health or care events. Product terms vary.
1035 exchange concepts
Certain properly structured exchanges may qualify for tax-deferred treatment under federal law. Transaction structure matters and professional tax guidance may be appropriate.
PJRC Existing Annuity Review
Before you replace it, understand it.
Already own an annuity? Bring us the contract, statement and the questions no one has clearly answered. The goal is to understand what you own before discussing what might come next.
Current contract or policy • Recent statements • Issue date • Current value • Surrender value • Rider information • Beneficiary information • Income objectives • Liquidity concerns • Questions you want answered
PJRC Private-Client Case Design
You don’t have to become an annuity expert.
You need someone who knows what questions to ask—and has the resources to get the answers.
PJRC can draw on professional case-design and advanced-planning resources where appropriate, helping turn complex contract information into an understandable conversation about your objectives, trade-offs and available choices.
The purpose is not to manufacture urgency. It is to make the decision understandable.
Market-Based Planning
Where investments may fit into the broader picture.
Retirement planning can involve insurance products, retirement accounts, market-based assets and other financial resources. These are not interchangeable, and different products and services may require different licenses, registrations or professional relationships.
PJRC currently provides insurance services only. PJRC does not offer securities, brokerage, portfolio management or investment-advisory services.
The PJRC Connection
Retirement rarely lives in one box.
Annual Stewardship
A good plan isn’t
something we forget about.
Life changes. Income needs change. Retirement dates move. Certain events deserve another conversation.
Resource Library
Useful questions.
Better conversations.
Insurance, Made Personal.
Your retirement deserves more than a product.
Understand what you own. Know what you’re trying to accomplish. Make the decision with confidence.
This page is intended for general educational purposes and is not individualized investment, tax or legal advice.
Annuity guarantees are subject to the financial strength and claims-paying ability of the issuing insurance company. Product features, riders, charges, surrender periods, crediting methods and availability vary by insurer, contract and jurisdiction.
Tax treatment depends on individual circumstances and applicable law. Consult an appropriate tax or legal professional when needed.