- About Us
- Retirement Planning
- Investment Planning
- Estate Planning
- Life Goals
- Business Succession Planning
- Roth IRA Conversion
- The Planning Process
- Financial Glossary
Companies of Focus
- Lab Employees
Oil Company Employees
- Chevron Newsletters
- Chevron General Planning
- How Personality Can Affect Performance
- Addressing Financial Planning Issues - Back to Basics
- 11 Financial Resolutions for 2011
- Midyear Review
- 5 Risks To Your Retirement Savings
- Retiring From Chevron - The Risk You Didn't Realize
- A Retirement Savings Tool You Might Be Missing
- Planning for a Long Retirement
- Roth IRA Conversions - a Golden Opportunity
- Demystifying IRA Distributions
- Simplifying Your Retirement From Chevron
- Plan Today for Retirement Tomorrow
- Managing Your Cash Flow in Retirement
- Budgeting to Retire
- Investment Risk - There's No Escaping It!
- Lessons Learned from the Market
- The Folly of Market Timing
- Dollar Cost Averaging
- Budgeting the College Lifestyle
- Fitting College Funding Strategies into your Overall Picture
- Five Ways to Cover College Tuition
- Teaching Children About Money
- Checking Up On Your Estate Plan
- Prepare Your Estate Plan for Changes in Tax Rules
- Covering All Bases for Timely Estate Planning
- Determining the Need for Disability Income Insurance
- The Hidden Cost of Health Insurance
- The American Taxpayer Relief Act of 2012
- Get Yourself in Tip-Top Tax Shape
- Think Twice About Your ESIP
- Talking Taxes
- Year End Tax List
- How Inflation Affects You
- Now That The Election's All Over
- The Flows in Your Plan
- How to Handle a Financial Windfall
- Dealing with Restructuring
- The Costs of Living Longer
- Tech Company Employees
- Client Center
- Contact Us
Growing your retirement savings is only one part of planning for your future. Have you thought about how you'll turn your "nest egg" into a monthly retirement income? Annuities are long-term savings vehicles designed to do just that: grow and protect your money leading up to retirement, then turn that money into an income stream you can't outlive.
Annuities can be categorized as fixed or variable depending on how contributions are invested and what guarantees are offered. With a fixed annuity, an insurer guarantees to pay a specified rate of interest on the accumulated value of the annuity for a specified period of time. If converted to an income stream for life, the payments will be fixed. With a variable annuity, both the accumulated value and the periodic payments vary with the performance of a specific portfolio of investments chosen by the contract owner.
Generally speaking, a fixed annuity is a more conservative investment. With a variable annuity, the contract owner can have a hedge against inflation but assumes the investment risk. However, a variable annuity also can offer fixed investment options.
Variable annuities are much more than a simple investment. They are an investment program with an important insurance component. This insurance component does add certain costs. But for many investors, the numerous benefits a variable annuity offers - including insurance protection, guaranteed lifetime income options, unlimited contributions and tax-deferred growth potential - make up for the slightly higher cost.
Because it involves a long-term commitment, it's important that you are comfortable with your decision to invest in an annuity. Following are some things to keep in mind while considering an annuity:
- Is your investment horizon long-term?Remember that annuities are long-term retirement savings programs. You should feel reasonably confident that you won't need the money for other expenses before the surrender charge period expires.
- Have you made the maximum contribution to your employer-sponsored retirement plan and/or tax-deductible IRA?While variable annuities offer benefits these other retirement programs do not, it makes good financial sense to contribute first to these other retirement plans. Unlike an annuity, contributions to these other plans may be deducted immediately from your current taxes.
- Are you in a high tax bracket?The higher your tax bracket, the more you'll be able to take full advantage of a variable annuity's tax-deferred growth.
- Are the insurance company and investment manager solid?Your variable annuity is an investment of a lifetime. You should make sure the insurance company has a history of financial strength and the investment company shows a track record of solid long-term performance.