Three Common Misconceptions About Income Annuities


By: John M. Campanola, Agent New York Life Insurance Company Special to the Boca and Delray newspapers

When it comes to retirement planning, your array of options may seem overwhelming. Between personal savings, employer plans, and government benefits, there’s a lot to take in. One solution that’s often misunderstood is an income annuity.

If the goal is guaranteed income, there’s a simple way to think about annuities – policyholders can receive income now or income later. Guaranteed income annuities provide income now, through Single Premium Immediate Annuities, or income later, through Deferred Income Annuities. The money in an annuity—which is invested as a lump sum or a period of payments, depending on the policy—generates a stream of income paid out for life.

While it may seem simple now, there are some misconceptions about how income annuities work. Here are the most common ones:

  1. Annuities don’t offer any growth

Certain annuities, like the New York Life Mutual Income Annuities*, pay income now or later, with the opportunity for dividends. While not guaranteed, dividends can provide additional income on top of the guaranteed lifetime income.   

  1. If I pass away, the insurance company keeps my money

With both Single Premium Immediate Annuities and Deferred Income Annuities, there are several types of payout options that provide your loved ones with a death benefit in the event you pass away. Typically, beneficiaries would receive the amount you put into the annuity less any income you had already received.

  1. Annuities lock away my money

If policyholders have unexpected short-term cash needs, some income annuities offer options to accelerate payments or make withdrawals.

Now that you’ve got a basic understanding, speak with a financial professional to learn more about if income annuity could be right for your retirement plan.

Camponola was also named the Delray Beach Chamber of Commerce Ambassador of the Year for 2018.

“Being an Ambassador with the Delray Chamber allows me to help promote and grow business in Delray Beach. We are often the connectors within the community. The Chamber provides numerous ways to network and meet new and existing businesses,” Campanola said.

The Ambassador Program consists of volunteers from the Delray Beach Chamber membership who donate their time to assist the Chamber in various activities. The Ambassadors assist in the promotion, volunteer support and development of various Chamber sponsored events.

“John exemplifies the characteristics of a truly dedicated volunteer.  As Ambassador, he goes above and beyond to assist the Ambassador Team and the Chamber in meeting its goals.  Whether he is helping a current member or talking with a potential one, he understands the value of building relationships in the business world,” said Jeb Conrad, President and CEO of the Delray Chamber of Commerce.

This educational third-party article is provided as a courtesy by John M. Campanola, Agent, New York Life Insurance Company. To learn more about the information or topics discussed, please contact John M. Campanola at 561-642-5180. Neither New York Life, nor its agents, provides tax, legal, or accounting advice. Please consult with your professional advisor for tax, legal or accounting advice.