Simple Guide To Annuities
If you’re 55 or older in the Tampa Bay area, you’ve probably heard the word “annuity.” For many people, it’s still a mystery. This short, plain-English “Simple Guide to Annuities” will explain what annuities are, how they work, and when they might make sense for your retirement plan.
I intend to answer most of your questions in this article, but if I miss something, please email me at support@myphss.com, and I will answer your question.
What is an annuity?
An annuity is a contract with an insurance company. You put in money (either a lump sum or over time), and in exchange you get guarantees, usually in the form of a monthly income you can’t outlive, or a guaranteed rate for a set period. Think of it as turning part of your savings into a personal pension.
The main types (keep it simple)
Fixed Annuity
Works a lot like a CD from a bank, but it’s an insurance product. You earn a fixed, declared rate for a set term. Your principal is protected by the insurer.Fixed Indexed Annuity (FIA)
Your growth is tied to a market index (like the S&P 500) with limits and protections. If the index goes up, you may get some of the gain (subject to caps/spreads). If it goes down, you don’t lose due to the index—your previous gains are locked in, but growth could be 0% that year.Immediate Income Annuity
You give the insurer a lump sum and income starts right away, typically for life or a set period. It’s designed to create a monthly paycheck.Deferred Income (a.k.a. longevity) Annuity
You put money in now, income starts later (for example at 70 or 75). Useful if you want to lock in future income.Variable Annuity
Invests in market subaccounts and can lose value. May offer optional income riders for a fee. Because the value can go up or down, make sure you fully understand risks and costs before considering this type.
Many Tampa Bay retirees prefer fixed and fixed indexed annuities for principal protection and predictable income.
💰 How do annuities pay you?
You can use an annuity as a place to grow money for a while, then take withdrawals later, or you can set it up to pay you a regular income now or at a future date. With income options, you choose how long payments last, your lifetime, a set number of years, or a combination (for example, lifetime with a guaranteed minimum period).
Here’s a simple picture: imagine placing $250,000 into an immediate income annuity when you retire. Based on your age and current rates, the insurer calculates a monthly check and sends it for as long as your payout option promises, often for life. That steady check can pair nicely with Social Security, and you will not outlive your money.
✅ What is an annuity?
Retirees often want simple answers to two questions: “Will my money last?” and “Can I avoid big swings in the market?” Annuities can help with both. They can deliver income you can’t outlive, reduce stress during market downturns, and grow tax-deferred until you take the money out. Many contracts also include ways to pass remaining value to a beneficiary, depending on how you set them up.
Florida’s lack of a state income tax is a welcome bonus for many locals when they consider how withdrawals fit into their overall plan.
What to watch for before you buy
Annuities are not everyday spending accounts. Most have a surrender period, often three to ten years, during which large withdrawals can trigger charges. Many allow a small amount to be taken each year without a penalty, but you should confirm the exact percentage and rules. Costs also vary. Optional features such as income riders or enhanced death benefits can add fees, so it pays to know the “all-in” cost. If you’re looking at a fixed indexed annuity, ask how growth is credited and whether caps or spreads can change over time.
Remember: the guarantees are only as strong as the issuing insurance company, so financial ratings matter.
When an annuity may fit and when it might not
An annuity can make sense if you want to turn a portion of your savings into a predictable monthly check, if market volatility keeps you up at night, or if you don’t need full access to the entire lump sum for several years. On the other hand, if you prefer maximum flexibility, anticipate large withdrawals in the near future, or are comfortable taking market risk for potentially higher growth, other options could be a better match. The right answer often involves a mix: some assets in the market for growth, some in guarantees for stability.
Questions we hear all the time
Can I get my money out if I need it?
Usually you can access a portion each year without a penalty, but bigger withdrawals during the surrender period can trigger charges. After that period ends, you typically regain full liquidity.
What about my spouse?
You can choose a joint lifetime payout so income continues for as long as either of you is alive. Payments are lower than a single-life option, but many couples appreciate the peace of mind.
How are payments taxed?
Earnings are generally taxed as ordinary income when withdrawn. If the annuity is inside an IRA, normal IRA rules apply. Florida’s lack of state income tax is helpful, but you should still plan for federal taxes.
How to shop smart in Tampa Bay
Start with your goal: do you want income now, income later, or protected growth? Ask directly about the surrender period, free-withdrawal amount, and all fees. Review how growth is credited, what could change in the future, and what the insurer’s financial ratings look like. Finally, compare options from more than one company so you can see, side by side, how the features and guarantees stack up.
Local, friendly help—no pressure, just clarity
At MyPHSS, we sit down with clients across Pasco, Pinellas, Hillsborough, Hernando, Citrus, and Polk counties to explain annuities in everyday language and see whether they fit your plan. We can meet at your kitchen table or by phone—whatever’s easiest.
📍 Local, Personal Service in Tampa Bay
At MyPhss, we’re not a call center or some out-of-state company. We are licensed local brokers who live and work right here in Tampa Bay.
We serve clients in:
Pasco County: New Port Richey, Dade City, Zephyrhills, Land O’ Lakes
Hernando County: Spring Hill, Brooksville
Pinellas County: Clearwater, Largo, St. Pete, Tarpon Springs
Hillsborough County: Tampa, Brandon, Plant City, Lutz
Polk County: Lakeland, Winter Haven, Bartow
Citrus County: Inverness, Crystal River, Homosassa
Whether you want to meet in person, talk on the phone, or do everything online, we make it simple. There’s no cost, no pressure, and no obligation — just honest help.
Contact Us Today
Whether you’re new to Medicare or considering switching your plan or you are looking for a fair and competitive quote for an Final Expense / Burial plan, we’re here to help you every step of the way.
📞 Call us at (813) 328-4664
📧 Email us at support@myphss.com
🌐 Visit us online at MyPHSS.com
Let’s protect your golden years with peace of mind and the right Final Expense or Medicare plan.
Disclaimer: This article is for general education and isn’t financial, tax, or legal advice. Annuity guarantees are backed by the claims-paying ability of the issuing insurer. Features, rates, and surrender periods vary by company and product; review each contract carefully before purchasing.
Annual Review: Review your plan annually to ensure it continues to meet your needs. To review your coverage, call 813-328-4664 or email us at support@myphss.com
I intended to answer most of your questions in this article, but if I missed something, please email me at support@myphss.com, and I will answer your question.
