Annuities

Annuities

In a world of market ups and downs, many Americans worry about outliving their savings. Annuities can help provide **guaranteed lifetime income**, principal protection, and tax-deferred growth — creating a personal pension-like stream you can never outlive.

At Alford Benefits, we help individuals, families, federal and postal employees, and business owners nationwide understand annuities and choose the right one for their goals. As an independent agency working with approximately 85 top-rated carriers, we offer unbiased guidance and access to a wide range of annuity solutions.

A Brief History of Annuities

Annuities are one of the oldest financial products in existence — dating back more than 2,000 years to the Roman Empire. The Latin word “annua” meant “annual stipend.” Roman citizens could make a single lump-sum payment in exchange for guaranteed annual payments for life. Roman jurist Domitius Ulpianus even created one of the earliest life expectancy tables to price these contracts fairly.

During the Middle Ages, kings and feudal lords used annuities (sometimes in the form of tontines) to raise money for wars. In the United States, annuities remained a small part of the insurance market until the 1930s, when concerns about banking stability during the Great Depression drove investors toward the safety of insurance-company products. The growth of group annuities for corporate pension plans further expanded the market. Today, modern annuities have evolved into sophisticated tools that combine insurance guarantees with tax advantages and flexible features.

Addressing Common Negative Attitudes

Annuities sometimes get a bad reputation — but many of the criticisms are based on outdated information or apply only to specific older products.

Common Myths Debunked:

• “Annuities are expensive with hidden fees” — Some variable annuities from years ago carried high fees, but today’s fixed and fixed indexed annuities often have very competitive costs. Many have no annual fees at all.
• “My money is locked away forever” — Most deferred annuities allow penalty-free withdrawals (typically 10% per year). You are not giving up access to your funds.
• “If I die early, the insurance company keeps everything” — This only applies to a small number of “life-only” immediate annuities. Most contracts today include death benefits that return remaining value to your heirs.
• “Annuities are only for retirees” — They can also be used earlier in life for tax-deferred growth or as a long-term planning tool.
• “I don’t need one if I have a 401(k) or IRA” — Annuities offer advantages traditional retirement accounts don’t — such as no contribution limits and guaranteed lifetime income.

Why Many Wealthy Individuals Choose Annuities

High-net-worth individuals and successful retirees often use annuities as a core part of their strategy — not because they need more money, but because they want to transfer risk and protect what they’ve built.

Wealthy clients frequently turn to annuities for:

• Guaranteed lifetime income that cannot be outlived, regardless of market performance
• Tax-deferred growth with no annual contribution limits (unlike IRAs or 401(k)s)
• Principal protection and shielding from market volatility
• Asset protection from creditors and lawsuits (strong protections exist in states like Texas and Florida)
• Estate planning benefits — death benefits can pass directly to heirs, often avoiding probate
• Peace of mind that allows them to invest more aggressively in other areas of their portfolio

Why Annuities Can Be Good for You

Annuities are not right for everyone, but they solve real problems:

• Protect against outliving your money (longevity risk)
• Provide predictable income in retirement
• Offer tax-deferred growth on your savings
• Reduce worry about market crashes or sequence-of-returns risk
• Deliver simplicity — one reliable income stream instead of managing multiple accounts

Is an Annuity Right for You?

The best way to know is through a personalized review of your retirement goals, income needs, and overall financial picture.

At Alford Benefits, we take the time to explain your options clearly — without pressure — so you can decide with confidence.

• Cash value earns interest based on current rates set by the insurer
• Good for clients who want flexibility as life changes.

Ready to learn more?

Schedule a no-obligation consultation today. We’ll walk you through how annuities might fit into your plan — whether you’re a federal employee, business owner, or individual anywhere in the United States.

• No medical exam required in most cases
• Great option for seniors or those with health conditions.