If you’re planning for retirement in The Villages, FL, and wondering how annuities work, you’re not alone. With Google searches for annuities skyrocketing over the last 18 months, retirees are looking for dependable, low-stress income strategies that don’t ride the rollercoaster of the stock market. One strategy rising to the top? Modern Annuities®. Many don’t really know how annuities work, so we want to break it down in simple terms.

This guide explains exactly what annuities are, how they function, and why thousands of Villagers are turning to them for protection and peace of mind. We’ll address common concerns around fees, market crashes, and 401(k) rollovers, all in plain English, the way Greg Parady lays it out in UnStress & UnTax Your Retirement™.

What Is an Annuity and How Does It Work?

At its core, an annuity is a financial contract you make with an insurance company. You contribute a lump sum or series of payments, and in return, the insurer guarantees income back to you, typically for life. Think of it like creating your own personal pension, but with modern features built for today’s retirement needs.

Modern Annuities® are not the same as your grandparents’ annuities. Today’s fixed indexed annuities (FIAs) can offer:

• Growth potential linked to market indexes (like the S&P 500) without risking your principal.
• Guaranteed lifetime income options for one or two spouses.
• Liquidity riders for access when needed.
• Death benefit options that pass unused value to your heirs.

In Greg’s words, “They’re the retirement seatbelt that keeps you protected when the market hits black ice.”

Fixed Indexed Annuities: Pros and Cons

This is one of the most searched-for questions in retirement planning, and for good reason.

Pros:

• Principal Protection: You cannot lose your original investment due to stock market downturns.
• Tax-Deferred Growth: Gains inside the annuity aren’t taxed until you withdraw.
• Steady Lifetime Income: Modern annuities can pay you (and your spouse) guaranteed monthly income for life.
• No Market Panic: In volatile markets, knowing your income won’t shrink can be priceless.

Cons:

• Caps or Participation Rates: You may earn only a portion of market gains.
• Surrender Periods: Early withdrawals may incur penalties.
• Optional Rider Fees: Income or liquidity riders often come with costs, but they’re disclosed upfront and can be well worth it.

As Greg says, “You wouldn’t get in a car without a seatbelt. Why go into retirement without one?”

Should You Rollover Your 401(k) into an Annuity?

It depends on your goals.

A 401(k) offers tax-deferred growth, but it doesn’t provide a built-in income stream. Once you retire, your assets must become income. That’s where annuities shine.

By rolling over part of your 401(k) into a Modern Annuity®, you can:

• Convert your balance into monthly income that mimics the paycheck you’re used to.
• Avoid market stress with principal protection.
• Plan for both spouses, ensuring steady income even after one partner passes.

And yes, rollovers can be done tax-free when properly structured.

Want to see what that might look like for you? Reach out to the Parady Learning Lounge® to explore personalized rollover options in a low-pressure, educational setting.

Are Annuities Safe if the Market Crashes?

This question is top of mind for many retirees, and the answer might surprise you.

Yes, Modern Annuities® can be safe even when markets drop.

That’s because fixed indexed annuities are not directly invested in the stock market. Instead, they credit interest based on the performance of an index, with zero downside risk.

If the market tanks? You earn 0% that year, but you never lose principal, or prior gains. Greg calls it “The Retirement Seatbelt Act” for a reason.

Plus, annuity providers must meet strict state reserve requirements and are backed by the financial strength of the issuing insurer.

Do Annuity Fees Eat Up My Retirement Check?

“Won’t the fees eat up my income?” This is one of the biggest misconceptions.

Here’s the truth:

• Modern annuities often have zero annual fees.
• Fees only apply if you choose optional riders, such as guaranteed income or enhanced liquidity.
• These fees are fully disclosed and capped. Many clients find that what they gain in peace of mind, predictable income, and spouse protection far outweighs the modest cost.

In fact, many Parady clients report lower stress and higher spending confidence once their income floor is secured.

Final Thoughts: Making Your Next 10 Your Best 10!®

Modern Annuities® aren’t about getting rich. They’re about getting secure.

If your dream is to play more pickleball, host family dinners, travel without worry, and never check the stock market again, then an annuity might just be the retirement seatbelt you need.

As Greg says, “Make your next 10 your best 10!®” by building income you can’t outlive, backed by strategies that let you live Your Life, Your Way℠.

Frequently Asked Questions About Modern Annuities

How do annuities work?

Annuities are contracts with insurance companies that allow you to turn a lump sum of savings into predictable monthly income. You may receive income for a set period or for life, depending on the type of annuity.

Are fixed indexed annuities safe?

Yes. Fixed indexed annuities protect your principal from market losses. If the market goes up, you may earn a portion of the gains; if it drops, you lose nothing.

Can I roll over my 401(k) into an annuity without paying taxes?

Yes. You can roll over a qualified retirement account into a Traditional IRA annuity without triggering taxes, as long as it’s done as a direct transfer.

What are the fees for annuities?

Many fixed annuities have no annual fees. Optional riders for lifetime income or liquidity may have fees, but they’re disclosed upfront and capped.

How can I tell if an annuity is right for me?

A financial professional can help you evaluate your goals, income needs, and lifestyle plans. You’ll want to understand income guarantees, surrender terms, and how it fits into your overall plan.

Disclaimer: This blog is for educational purposes only and does not constitute investment, tax, or legal advice. Annuity guarantees are backed by the financial strength of the issuing insurer. Contact Parady Financial Group, Inc. for personalized recommendations. This is paid advertising for annuities and life insurance. Life Expectancy Statistics