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Investment Services, Annuities & Income

Get Peace of Mind with Guaranteed Income

Guaranteed income during retirement means you can have the retirement you dream of. Whether that means taking up a new hobby, RVing across the U.S., or remodeling your home, knowing you have enough money to do the things you enjoy is what you’ve been working towards your whole life. A deferred income annuity can help you to live retirement on your terms.

Times are Changing

Retirement looks different now than it did in the past. Employers used to offer pensions, which would last the life of the employee. Since people are living longer, companies can no longer afford to pay retirees year after year. Now, a 401(k) and an Individual Retirement Account (IRA) are the main sources of income during retirement.

Another Option

There are numerous investment vehicles that can be used for retirement income, however, not all are set up to offer the same monthly payment. The good news is that investors have other options. For anyone who wants the security of regular payments for a set amount of time or for the rest of their life, a deferred income annuity might be the right option. Unlike required minimum distributions (RMD) that accompany other investment types, you get to choose when to start receiving money.

How a Deferred Income Annuity Works

A deferred annuity works like an insurance contract which generates money for retirement and can be purchased before or after retirement. Deposits can be made in one lump sum or periodically over time and are kept in the account for a minimum timeframe before they can be used. The annuity then provides repayments that come from the investment premium, interest from the annuity company, and from risk pooling. This means the money is never influenced by changing markets. Depending on how much you invest in the annuity and how long you want it to last, determines how much you’ll get monthly once you start receiving payments from it. In general, the longer you want payments, the lower the monthly amount.

Reasons to Choose a Deferred Income Annuity

There are three main reasons to choose a deferred income annuity, the first being that it can last your entire lifetime, much like a pension does. Should the stock market hit record lows, the deferred income annuity isn’t impacted like stocks or bonds would be. Second, unlike a 401(k) or IRA that has a set amount of money in it, a deferred income annuity won’t decrease in value like other retirement accounts might. Finally, this type of retirement vehicle can be set up to cover multiple different scenarios, such as increasing with inflation, adding a spouse to it, having a death benefit, and getting payments monthly, quarterly, semiannually, or annually.

Things to Take into Consideration Before Signing on the Dotted Line

As with any investment, it’s important to consider not only the benefits, but any negatives as well. When it comes to deferred income annuities, it’s important to remember that it doesn’t increase in value like other retirements tied to the market might. Additionally, plans cannot be surrendered or terminated. There’s never an account value stated and you’ll have limited access to your money. The IRS penalizes anyone who purchases a deferred income annuity before 59½ years of age and who takes accelerated distributions. A portion of distributions can be taxed as traditional income. Most importantly, if the insurance company becomes insolvent, your state insurance guarantee association will determine how much you’ll get back. That amount could be a portion of the money you’ve given them or nothing.


There are always pros and cons to every type of investment. For trustworthy and dependable information, please reach out to one of our Financial Advisors who can help walk you through the best options for your specific situation.

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The financial advisors of Orange County's Retirement & Investment Services are registered with and offer securities and advisory services through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/ SIPC). Insurance products are offered through LPL or its licensed affiliates. Orange County's Credit Union and Orange County's Retirement & Investment Services are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Orange County's Retirement & Investment Services, and may also be employees of Orange County's Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, Orange County's Credit Union or Orange County's Retirement & Investment Services. Securities and insurance offered through LPL or its affiliates are:

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