Get clear, honest answers to the most common questions about annuities, retirement income planning, and how Atlas Annuities can help you make confident decisions.
Annuities aren't one-size-fits-all. The answers below provide general guidance, but the best solution for your retirement depends on your unique goals, timeline, and financial situation. That's why we recommend completing our personalized annuity survey—it takes just 3 minutes and provides tailored recommendations based on your specific needs.
Start with the basics—what annuities are and how they work
An annuity is a contract between you and an insurance company designed to provide retirement income. You make one or more payments to the insurer, and in return, they provide you with guaranteed income payments—either immediately or at a future date.
Think of an annuity as a personal pension you create for yourself. It can provide lifetime income, principal protection, or tax-deferred growth—depending on the type you choose. Annuities are particularly useful for retirees who want to ensure they don't outlive their savings.
Annuities work in two main phases:
The insurance company invests your funds and uses actuarial calculations to guarantee income payments, even if you live longer than expected. This is how annuities eliminate longevity risk.
Yes—when issued by highly rated insurance carriers. Annuities are backed by the financial strength and claims-paying ability of the insurance company. Atlas Annuities only recommends carriers with A or higher ratings from agencies like A.M. Best, S&P, and Moody's.
Additionally, insurance companies are heavily regulated by state insurance departments and are required to maintain substantial reserves. In the rare event of insurer insolvency, most states have guaranty associations that provide protection (typically up to $250,000).
Important: Fixed and fixed indexed annuities protect your principal from market losses. Variable annuities carry market risk.
Annuities may be a good fit if you:
Not right for everyone: Annuities are not ideal if you need full liquidity, are very young, or have limited assets. Atlas Annuities provides personalized recommendations based on your situation—not a one-size-fits-all approach.
Our 3-minute survey provides personalized annuity recommendations based on your age, timeline, and objectives.
Start Free EvaluationHow annuities create guaranteed retirement income
Yes. This is one of the primary benefits of annuities. When you "annuitize" your contract or activate a lifetime income rider, the insurance company guarantees to pay you a specific amount for as long as you live—even if you live to 100+ and the account value is depleted.
This eliminates longevity risk—the risk of outliving your savings. The insurance company can make this guarantee by pooling risk across thousands of annuity holders and using actuarial science to calculate sustainable payout rates.
Example: A 65-year-old investing $500,000 might receive $2,500–$3,500/month for life, depending on the product and payout options selected. Atlas Annuities can show you multiple carrier quotes to compare.
Annuities transfer longevity risk from you to the insurance company. Here's how:
This is fundamentally different from traditional retirement accounts, where you bear all the longevity risk. With an annuity, you can't outlive your income—it's contractually guaranteed.
The timing depends on your personal retirement plan:
General Rule: The longer you wait to start income, the higher your monthly payments will be (because the insurance company has less time to pay you).
Atlas Annuities helps you model different start dates to see which strategy maximizes your retirement income based on your goals.
It depends on the product. Most basic annuity income payments are fixed for life, meaning they don't adjust for inflation. However, there are options:
Atlas Annuities can help you evaluate whether adding inflation protection makes sense for your retirement plan, or if maximizing initial income is more important.
See how much guaranteed income you could receive based on your age and investment amount.
Calculate My Income PotentialUnderstanding how annuities grow and protect your principal
Yes—with fixed and fixed indexed annuities. These products protect your principal from market losses while providing growth potential:
Important: Variable annuities DO carry market risk—your account value can go down if investments perform poorly. Atlas Annuities typically recommends fixed or indexed annuities for principal protection.
A Fixed Indexed Annuity (FIA) is a type of annuity that offers upside growth potential with downside protection. Here's how it works:
FIAs are popular among retirees who want growth potential but can't afford the risk of market losses. They're a middle ground between fully fixed and variable annuities.
It depends on the type of annuity:
Surrender Charges: All annuities have surrender periods (typically 5-10 years). If you withdraw more than the free withdrawal amount during this period, you may face penalties. This isn't a "loss," but a contractual penalty for early withdrawal.
Atlas Annuities ensures you fully understand surrender terms, liquidity options, and risks before recommending any product.
In fixed indexed annuities, caps and participation rates determine how much of the index's growth you receive:
These mechanisms allow the insurance company to offer downside protection while sharing index gains with you. Atlas Annuities compares multiple carriers to find the most competitive caps and participation rates for your needs.
See which annuities offer the best balance of growth potential and principal protection for your situation.
Find My Protected Growth StrategyUnderstanding liquidity, fees, and accessing your money
Yes, but with some limitations. Most annuities allow free withdrawals of 10% of your account value per year without penalty, even during the surrender period. This provides some liquidity for emergencies.
Surrender Charges: If you withdraw more than the free amount during the surrender period (typically 5-10 years), you'll pay a penalty—often 5-10% of the withdrawal amount in early years, declining to 0% by the end of the period.
Exceptions: Many annuities waive surrender charges in cases of:
Bottom Line: Annuities are designed for long-term retirement income, not short-term liquidity. Atlas Annuities helps you ensure you have enough liquid assets outside the annuity before committing funds.
Surrender Periods: Yes, most annuities have surrender periods ranging from 3-10 years. During this time, withdrawing more than the free amount (typically 10%/year) results in penalties.
Ongoing Fees:
Important: Shorter surrender periods often mean lower growth rates or income payouts. It's a trade-off between liquidity and performance.
Atlas Annuities discloses all fees, surrender terms, and free withdrawal provisions upfront so you know exactly what you're getting.
It depends on the annuity type and payout option you selected:
Atlas Annuities helps you choose payout options that balance your income needs with legacy planning goals.
How our process works and what to expect
Our annuity survey is a quick, 3-minute questionnaire designed to understand your retirement goals and situation. Here's how it works:
The survey helps us provide relevant recommendations instead of generic options. It's fast, free, and completely private.
Absolutely not. Completing the survey is 100% free with zero obligation. You're under no pressure to purchase anything.
Our goal is to educate you and provide personalized guidance so you can make informed decisions on your own timeline. Whether you move forward immediately, in 6 months, or decide an annuity isn't right for you—we're here to help, not pressure.
Many clients complete the survey just to learn their options and understand what's available. There's no commitment required.
Yes. After you complete the survey, one of our licensed annuity specialists will reach out—usually within 24 hours—via phone call or text message.
What to expect:
Please watch for our call or text so we can connect and provide your personalized review. We respect your time and won't waste it with high-pressure sales tactics.
Yes! Atlas Annuities is licensed to serve clients in all 50 states. Our team works virtually, so you can access expert annuity guidance no matter where you live.
Everything is handled remotely via:
Whether you're in California, Texas, Florida, New York, or anywhere in between—we're here to help you secure your retirement income.
Absolutely. Your privacy is a top priority at Atlas Annuities. Here's our commitment:
You can review our full Privacy Policy for complete details on how we protect your information.
Complete our 3-minute survey and a licensed specialist will provide tailored guidance based on your unique retirement goals—at no cost and with zero obligation.
Understanding the tax implications and planning benefits
Annuity taxation depends on how they're funded and when you take distributions:
Early Withdrawal Penalty: If you take distributions before age 59½, you may owe a 10% IRS penalty on earnings (in addition to ordinary income tax).
Important: Atlas Annuities does not provide tax advice. Consult with a qualified tax professional or CPA to understand your specific tax situation.
Yes. Annuities grow tax-deferred, meaning you don't pay taxes on earnings until you withdraw them. This allows your money to compound without annual tax drag—similar to an IRA or 401(k).
Benefits of tax deferral:
Note: Tax deferral is most beneficial for non-qualified annuities. If you're rolling over an IRA or 401(k), the funds are already tax-deferred, so this isn't an additional benefit.
Yes. Annuities can be powerful legacy planning tools:
Tax Implications: Beneficiaries may owe income tax on inherited annuity gains, depending on how the annuity was funded and whether they take a lump sum or stretch distributions.
Atlas Annuities can help you structure your annuity to balance income needs with legacy goals. Consult an estate planning attorney for complex situations.
Every Annuity Is Different: The information provided on this page represents general guidance. Specific features, guarantees, fees, and benefits vary by carrier, product, and contract. What works for one retiree may not be ideal for another.
Personalized Recommendations: Atlas Annuities provides recommendations based on your individual circumstances, goals, risk tolerance, and suitability requirements. We do not offer one-size-fits-all solutions.
Your Privacy Is Protected: We never sell, rent, or share your personal information with third-party marketers. Your data is used solely to provide personalized annuity guidance and service. See our Privacy Policy for details.
Independent & Unbiased: As an independent agency, we're not captive to any single insurance carrier. We compare 50+ carriers to find you the best rates, features, and financial strength ratings—based on what's best for you, not sales quotas.
Guarantees Subject to Carrier: All annuity guarantees are backed by the claims-paying ability and financial strength of the issuing insurance company. Atlas Annuities only recommends carriers with A or higher ratings from agencies like A.M. Best, S&P, and Moody's.
Not Tax or Legal Advice: Atlas Annuities does not provide tax, legal, or estate planning advice. We recommend consulting with qualified professionals (CPA, attorney, financial planner) for comprehensive retirement planning.
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