Retirement Income Planning

Annuities — Guaranteed Income
You Cannot Outlive

Fixed and fixed indexed annuities offer tax-deferred growth, principal protection, and guaranteed lifetime income — without market risk. We help you find the right structure for your retirement goals.

Note: Hutchison Insurance Group offers fixed and fixed indexed annuities only. We do not sell variable annuities, which are securities products requiring a separate license and carry direct market risk.

The Case for Annuities

The Only Product That Guarantees You Won't Outlive Your Money

Social Security provides a foundation, but for most retirees it is not enough to cover all essential expenses. A pension from an employer is increasingly rare. Annuities fill that gap — they are the only financial product that can contractually guarantee income payments for as long as you live, no matter how long that is.

Fixed and fixed indexed annuities also offer tax-deferred growth during the accumulation phase, meaning your money compounds without being reduced by annual income taxes. This makes them an efficient vehicle for retirement savings, particularly for funds that won't be needed for several years.

Principal protection — no market losses
Tax-deferred growth
Guaranteed lifetime income options
Probate-free death benefit to beneficiaries
1035 exchange — no tax event to switch
Missouri Guaranty Association protection

Principal Protected

Your premium cannot be lost due to market downturns

Tax-Deferred Growth

No annual taxes on credited interest during accumulation

Guaranteed Income

Lifetime income options that cannot be outlived

Flexible Funding

Qualified (IRA) or non-qualified (after-tax) money

Annuity Types at a Glance

All four types we offer — no variable annuities

TypeMarket RiskGrowth PotentialIncomeBest For
Fixed AnnuityNoneGuaranteed rateOptionalSafety & predictable growth
Fixed Indexed (FIA)None (0% floor)Index-linked, cappedOptional + riderGrowth potential + protection
SPIANoneN/A (immediate payout)Immediate & guaranteedConverting savings to income now
DIA / QLACNoneN/A (future payout)Future guaranteed incomeLongevity protection & RMD planning

Variable annuities are securities products that carry direct market risk and require a separate securities license. We do not offer variable annuities.

Products We Offer

Annuity Options — Explained in Plain English

Click "Broker's Notes" on each card for practical tips and things to watch out for.

Fixed Annuity

Guaranteed Rate

A fixed annuity is a contract with an insurance company that guarantees a specific interest rate on your premium for a defined period — typically 2 to 10 years. Similar to a bank CD but with tax-deferred growth and generally higher rates. At the end of the guarantee period, you can renew, roll to a new annuity, annuitize for income, or take a lump sum.

Key Features

  • Guaranteed fixed interest rate for the full contract term
  • Tax-deferred growth — no annual taxes on interest earned
  • Principal is fully protected — no market risk
  • FDIC-equivalent protection through state guaranty associations
  • 10% annual free withdrawal typically available without penalty
  • Surrender charges apply to withdrawals beyond the free amount (typically 5–10 year period)
  • 10% IRS early withdrawal penalty before age 59½ (same as IRAs)
  • Available as qualified (IRA) or non-qualified (after-tax) funding

Best For

Conservative savers who want guaranteed growth with no market exposure — ideal as an alternative to CDs or money market accounts for funds not needed immediately.

Fixed Indexed Annuity (FIA)

Index-Linked + Protected

A Fixed Indexed Annuity credits interest based on the performance of a market index — such as the S&P 500, Nasdaq 100, or a multi-asset index — subject to a cap, participation rate, or spread. Your principal is protected from market losses: in a down year, you earn 0% (not negative). In an up year, you earn a portion of the index gain. FIAs are insurance products — not investments — and do not directly participate in the market.

Key Features

  • Principal protection — you cannot lose money due to market downturns
  • 0% floor — worst-case annual credit is 0%, never negative
  • Interest linked to a market index (S&P 500, Nasdaq, Russell 2000, etc.)
  • Cap rate: maximum interest you can earn in a period (e.g., 8% cap)
  • Participation rate: percentage of index gain you receive (e.g., 70%)
  • Spread/margin: amount subtracted from index gain before crediting
  • Tax-deferred growth — no annual taxes on credited interest
  • Income riders available for guaranteed lifetime income (additional cost)
  • Available as qualified (IRA) or non-qualified funding

Best For

Savers who want the potential to earn more than a fixed annuity while maintaining full principal protection — a middle ground between the safety of fixed annuities and the growth potential of market investments.

Single Premium Immediate Annuity (SPIA)

Immediate Guaranteed Income

A SPIA converts a lump sum into a guaranteed stream of income payments that begin within 30 days to 12 months of purchase. You deposit a single premium and immediately begin receiving regular payments — monthly, quarterly, semi-annually, or annually — for the period you choose. SPIAs are the simplest and most straightforward way to create a personal pension from existing savings.

Key Features

  • Guaranteed income payments begin immediately (within 30–365 days)
  • Payments are guaranteed for the option you select — cannot be outlived with life options
  • Life Only: highest payment, stops at death
  • Life with Period Certain (10 or 20 yr): continues to beneficiary if you die early
  • Joint & Survivor: continues to spouse at 50%, 75%, or 100% after your death
  • Period Certain Only: payments for a fixed number of years regardless of survival
  • Payments are partially taxable — return of principal portion is tax-free (exclusion ratio)
  • Once annuitized, principal is no longer accessible as a lump sum
  • Rates depend on age, gender, interest rates, and payout option

Best For

Retirees who want to convert a portion of savings into a predictable, guaranteed monthly income — similar to a pension. Particularly valuable for covering essential expenses that Social Security doesn't fully cover.

Deferred Income Annuity (DIA) / Longevity Annuity

Future Guaranteed Income

A Deferred Income Annuity (DIA) — also called a longevity annuity — is purchased today with a lump sum premium, but income payments begin at a future date you choose, typically 2 to 30 years from now. The longer the deferral, the higher the future income payment. DIAs are specifically designed to address longevity risk — the risk of outliving your money in your 80s and 90s. A Qualified Longevity Annuity Contract (QLAC) is a DIA funded with IRA money under special IRS rules.

Key Features

  • Purchase today, income begins at a future date you choose
  • Longer deferral period = significantly higher income payments
  • Guaranteed income for life — cannot outlive the payments
  • QLAC: funded with IRA money, defers Required Minimum Distributions (RMDs)
  • QLAC limit: up to $200,000 of IRA funds (2024 IRS limit)
  • QLAC income must begin no later than age 85
  • Death benefit options available to return premium to beneficiaries
  • Payments are taxable as ordinary income when received
  • Ideal complement to Social Security and other retirement income sources

Best For

Pre-retirees who want to lock in future guaranteed income at today's rates — particularly those concerned about outliving their savings in their 80s and 90s. QLACs are especially useful for IRA holders who want to reduce RMDs.

Retirement Income Strategy

Where Annuities Fit in a Retirement Plan

Pre-Retirement (Accumulation)

  • Fixed Annuity — guaranteed growth, no market risk
  • Fixed Indexed Annuity (FIA) — index-linked growth with 0% floor
  • Deferred Income Annuity (DIA) — lock in future income at today's rates

Tax-deferred accumulation with principal protection. Ideal for funds you won't need for 5+ years.

At Retirement (Income Transition)

  • SPIA — convert lump sum to immediate income
  • FIA with Income Rider — turn on guaranteed income while keeping account value
  • 1035 Exchange — roll existing annuity into income-focused product

Convert accumulated savings into a reliable income stream to cover essential expenses.

Late Retirement (Longevity Protection)

  • DIA / QLAC — income that starts at 80 or 85
  • QLAC — defer IRA RMDs while ensuring late-life income
  • Existing FIA income rider — payments continue for life

Protect against outliving savings in your 80s and 90s — the highest-cost years of retirement.

Tax Considerations

How Annuities Are Taxed

Qualified Annuity (IRA / 401k Rollover)

  • Funded with pre-tax money (IRA, 401k rollover, etc.)
  • Growth is tax-deferred
  • All withdrawals and income payments are fully taxable as ordinary income
  • Subject to Required Minimum Distributions (RMDs) starting at age 73
  • 10% early withdrawal penalty before age 59½
  • QLAC can defer RMDs on up to $200,000 of IRA funds

Non-Qualified Annuity (After-Tax Money)

  • Funded with after-tax money (personal savings, CD rollover, etc.)
  • Growth is tax-deferred — no annual taxes on credited interest
  • Withdrawals: interest/gains come out first and are taxable (LIFO)
  • Income payments: partially taxable via exclusion ratio
  • 10% early withdrawal penalty before age 59½
  • Death benefit passes to beneficiaries outside of probate

Tax treatment of annuities is complex and depends on your individual situation. The information above is general in nature. Consult a qualified tax professional before making annuity decisions based on tax considerations.

Key Terms

Annuity Glossary

Click any term to expand the definition.

Ready to Explore Annuity Options?

We compare fixed and fixed indexed annuities across multiple carriers to find the right fit for your retirement income goals — at no cost to you.