April 1, 2025
From Uncertainty to Stability:
How Annuities Can Support You Through a Recession
There’s been more conversation lately about a potential economic slowdown. While no one can predict exactly what the economy will do next, it’s always a good idea to understand how recessions work and what they could mean for your financial plans. In short, a recession typically refers to a significant dip in economic activity — often tied to rising inflation, reduced consumer spending, or other unexpected disruptions.
One common response to an economic slowdown? Lower interest rates. When the Federal Reserve lowers rates to support the economy, that can affect how much you earn from savings or new income-producing products.
If market swings make you uneasy, you’re not alone. Volatility can have a big impact on retirement accounts and long-term goals — especially for those relying heavily on equities (aka: stocks).
That’s where annuities can help. Certain annuity products offer protection from market downturns, while still supporting your income goals. Fixed annuities, such as KSKJ Life Multi-Year Guaranteed Annuities (MYGAs) are designed to provide income and financial reassurance, no matter what the market is doing.
The Tax Deferral Advantage: How Annuities Compare to CDs
It’s common to consider Certificates of Deposit (CDs) as a low-risk savings option — and for short-term goals, they can be useful. But if you’re looking for longer-term growth with added benefits, annuities may offer a smarter solution.
One of the key differences? How your earnings are taxed.
With CDs, any interest earned is typically taxed each year — even if you don’t withdraw it. Annuities, on the other hand, offer tax-deferred growth. That means your earnings can accumulate without being taxed until you actually take money out, giving your savings more time to grow over the years. This advantage may seem simple, but it can have a meaningful impact on how efficiently your money works for you over time — especially in an inflation-sensitive environment.
What Does the Federal Reserve Have to Do With It?
You’ve probably heard about the Federal Reserve (or “the Fed”) raising or lowering interest rates — but how does that actually affect your financial options?
In short, the Fed adjusts rates to keep the economy balanced. When inflation is high, they may raise rates to cool things off. During a slowdown, they often lower rates to encourage borrowing and spending.
For you, that means one thing: changing rates can impact how much your savings grow — or how steady your income feels in retirement. That’s why annuities can be such a helpful tool. They allow you to lock in current rates and create predictable income, even if interest rates go down later.
Preparation Without Pressure
Economic ups and downs are part of the cycle — but your plan doesn’t have to follow the same path.
At KSKJ Life, we’re here to help you explore smart, simple strategies like annuities that offer:
-Locked-in rates while they’re still strong
-Tax-deferred growth for more long-term potential
-Guaranteed income that helps you stay steady — no matter what the market does
Whether you’re nearing retirement or just planning ahead, our team is ready to help you build a financial foundation that feels secure and makes sense for you.
