May 5, 2025
Your Top Annuity Questions Answered
Did you know that 4 out of 5 Americans aren’t familiar with annuities1? When it comes to retirement, annuities can be a valuable tool to help maximize your savings with long-term security. Particularly during uncertain market conditions like inflation or a recession, annuities offer a strong option in a balanced retirement strategy. Here are the top questions many retirees and pre-retirees have about annuities.
1. What is an annuity, and why are more retirees buying them?
An annuity is a financial solution offered by insurance companies that provides a steady income stream during retirement. You contribute a lump sum at the start, and in return, the insurer makes regular payments to you, either immediately or in the future. Generally, the longer the annuity term, the higher the interest rate you can lock in, which makes longer-term annuities especially attractive in uncertain economic times.
Annuities are simple solutions that help cover basic living costs like housing, food, and healthcare. But they can also fulfill bucket list items like house remodeling projects or vacations. With the right annuity, you can rest easy knowing your income is secure, even in volatile markets.
At KSKJ Life, we offer flexible annuity terms to fit a range of retirement goals. Options include single-premium immediate annuities (SPIAs) for income now and multi-year guaranteed annuities (MYGAs) for income later.
One major concern for retirees is: “Will I run out of money?” Some annuities—such as Certain and Life SPIAs—continue to pay for as long as you live. That’s a powerful way to protect yourself from outliving your savings, especially if you live well into your 80s or 90s.
2. Are annuities a good idea during inflation, a recession, or other market uncertainty?
Yes — annuities can be a smart and reassuring choice for retirement income, particularly for those who prefer predictable income and want to avoid market volatility. They function like a “retirement paycheck,” offering dependable payments, much like Social Security or a pension.
In a volatile market, fixed annuities are especially attractive. They lock in guaranteed interest rates and consistent payments regardless of how the economy or stock market performs. Learn more in our blogs:
–How Does Inflation Affect Retirement Savings?
–How Annuities Can Support You Through a Recession
3. How do annuities fit into your overall retirement savings plan? Can they supplement Social Security?
Yes — annuities can play a key role alongside Social Security. Since Social Security typically only covers about 40% of retirement expenses, annuities help bridge that gap by providing another reliable income stream. Our “Top Social Security & Retirement Planning Questions” blog goes into more specific details on Social Security and annuities.
4. How do annuities compare to CDs?
During periods of economic slowdown or recession, interest rates often drop, which reduces the yield on CDs or savings accounts. But with certain annuities — like multi-year guaranteed annuities (MYGAs) — you can lock in a higher rate for several years, protecting your earnings even if market rates fall.
5. What are the tax benefits of annuities?
Unlike CDs or savings accounts, annuities can grow tax-deferred. This is the case with KSKJ Life’s MYGAs. You don’t pay taxes on the interest earned until you withdraw the money, allowing your contribution to grow faster over time — an especially powerful benefit over the course of a 10- or 20-year retirement.
6. Is my money safe in an annuity?
That’s one of the most important and smart questions you can ask. Fixed annuities, like those offered by KSKJ Life, are not tied to the stock market. Your money grows based on a fixed interest rate in your contract, unaffected by daily market fluctuations. Also, providers like KSKJ Life are heavily regulated and must maintain strong reserves. As a fraternal benefit society with 131+ years of history, KSKJ Life prioritizes long-term security over risky profits. In short: yes, your money can be safe — especially when you work with a financially sound, transparent provider like KSKJ Life.
7. What if I need to access to my money early?
Most annuities include a “surrender period” during which early withdrawals beyond a certain amount (often 10% annually) may incur fees. Withdrawing funds before age 59½ can also trigger a 10% IRS penalty on top of regular income tax.
However, many annuities — including those from KSKJ Life — offer options, such as riders, that can provide free annual withdrawals up to a certain percentage.
While it’s best to leave your funds in place until maturity, you’re not completely locked in.
8. Who should consider an annuity – and at what age?
Annuities are generally most beneficial for people aged 55–80, especially if you:
-Want to supplement Social Security or a pension
-Prefer predictable monthly income
-Are concerned about inflation or market volatility
-Want tax-deferred growth
-Worry about outliving your savings
9. Why choose KSKJ Life for an annuity or life insurance?
When you choose KSKJ Life, you’re choosing more than just a financial product — you’re choosing over 131 years of strength, stability, and service. We’ve supported members through world wars, recessions, and more — all with a steady hand and a long-term mindset. That kind of legacy doesn’t just happen — it’s built on trust, conservative financial practices, and a deep commitment to the people we serve.
As a not-for-profit fraternal benefit society, we’re focused on our members, not shareholders. Our earnings go back into programs that serve communities.
When you join KSKJ Life, you become part of a caring, values-driven community with access to trusted annuity and life insurance solutions designed for real retirement needs.
Want to learn more? Check out our retirement planning blogs:
How Annuities Can Support You Through a Recession
Retirement and the Economy: How Does Inflation Affect Retirement Savings?
Social Security and Retirement Planning: Answers to Your Top Questions
Smart Financial Move in Uncertain Times
Smart Retirement Planning for Immediate Income
