How to Buy an Annuity in Florida: Step-by-Step Guide
If you're ready to buy an annuity in Florida, this simple 5-step process will help you make a wise, confident decision. Whether you're just starting your research in Orlando or working with a local advisor in Daytona Beach, these steps apply statewide.
1. Evaluate Your Retirement Goals and Needs
Start by identifying what you want your annuity to achieve. Are you seeking guaranteed income, tax deferral, market growth, or legacy planning? Your financial goals will determine which type of annuity fits best.
2. Research the Different Types of Annuities
Understand the differences between fixed, variable, indexed, and immediate or deferred annuities. Each has unique features and benefits tailored to different retirement strategies and risk tolerances.
3. Compare Rates and Providers
Not all annuities are created equal. Shop around to compare payout rates, fees, surrender charges, and added benefits. Work only with licensed Florida insurance providers and trusted fiduciaries.
4. Verify Florida Licensing and Legal Protections
Ensure your annuity advisor and insurance provider are licensed in Florida. This gives you access to the state’s robust consumer protections, including a 30-day free-look period and asset protection laws.
5. Meet with a Florida Fiduciary Advisor
Before you make a final decision, meet with a fiduciary who specializes in annuities. An experienced advisor can explain the fine print and match you with the right annuity for your goals.
Why Florida Retirees Buy Annuities
Florida offers retirees a unique mix of financial benefits and legal protections that make buying an annuity even more attractive. From tax advantages to strong asset protection, here's why retirees across the state are turning to annuities.
Guaranteed Lifetime Income You Can’t Outlive
Annuities provide a steady stream of income that continues for life, even if your original investment runs out. This makes annuities ideal for retirees worried about outliving their savings.
Tax-Free Annuity Withdrawals at the State Level
Florida doesn’t tax annuity income, giving retirees more financial freedom. You’ll still pay federal taxes, but no state income tax means more of your retirement income stays with you.
Strong Legal and Asset Protection
Florida law protects annuities from most creditors and lawsuits. This gives retirees added peace of mind, especially business owners or those with high net worth.
Types of Annuities Available in Florida
Florida residents can choose from various annuities depending on their retirement goals. Here's a breakdown of the most common types:
Fixed Annuities
Offer predictable, guaranteed interest rates and stable income. They are ideal for conservative investors seeking security and simplicity.
Indexed Annuities
Linked to the performance of a market index like the S&P 500. These provide growth potential while protecting against market losses.
Variable Annuities
Allow investments in market sub-accounts. They offer higher upside potential but come with added risk and fees.
Immediate vs. Deferred Annuities
Immediate annuities begin paying income almost immediately. Deferred annuities accumulate value over time before distributions begin.
Florida Annuity Laws, Taxes & Protections
When you buy an annuity in Florida, you benefit from some of the most consumer-friendly laws in the country.
30-Day Free Look Period
Florida law gives you 30 days to cancel and receive a full refund after purchasing an annuity, no questions asked.
No State Income Tax on Annuities
Florida doesn’t tax retirement income, including annuity withdrawals. That means more of your money stays in your pocket.
Protection from Creditors
In most cases, Florida law protects the value of your annuity from creditors, making it a powerful estate and asset protection tool.
Frequently Asked Questions
When Is the Best Time to Buy an Annuity?
Many people buy annuities in their 50s or 60s as they approach retirement. The best time is when you need predictable income and want to protect your savings from market risk.
Do I Have to Pay Taxes on Annuity Income in Florida?
Florida doesn’t tax annuity withdrawals at the state level, but federal income taxes still apply to the earnings portion of your distributions.
Can I Withdraw Money Early?
Yes, but early withdrawals during the surrender period may result in penalties and fees. Some contracts allow up to 10% annual withdrawals without penalty.
How Much Money Do I Need to Buy an Annuity?
Most annuities have minimums between $5,000 and $25,000, depending on the product and provider.
Florida Annuity Glossary
Buying an annuity in Florida shouldn't require a finance degree. Here’s a quick breakdown of the terms.
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Deferred Annuity – A Florida annuity where your money grows tax-deferred until you’re ready to begin taking retirement income. Those planning often use it and do not need income immediately.
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Immediate Annuity – A retirement income annuity that begins paying out shortly after purchase—typically within 30 to 60 days. Ideal for Florida retirees looking to turn a lump sum into guaranteed income now.
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Fixed Indexed Annuity – A Florida annuity that earns interest based on a market index (like the S&P 500), but with principal protection — meaning your original investment is never at risk due to market downturns.
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Qualified Annuity – A type of annuity purchased with pre-tax retirement funds, such as from an IRA or 401(k). Income from a qualified annuity is taxed as ordinary income when withdrawn.
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Non-Qualified Annuity – Funded with after-tax money. Only the earnings portion is taxed when withdrawn. These annuities are common in retirement planning in Florida for tax flexibility and long-term growth.
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Cap Rate – The maximum interest rate your indexed annuity can earn during a set period. Even if the index performs higher, your credited earnings are limited to this cap.
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Participation Rate – The percentage of a market index’s gains that are credited to your annuity. For example, if the S&P 500 rises 10% and your participation rate is 70%, your annuity earns 7%.
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Florida Guaranty Association – A Florida-specific safety net that protects annuity owners if their insurance company fails. In Florida, you're covered for up to $250,000 per person, per insurer. This applies when you buy an annuity in Florida through a licensed carrier.
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Principal Protection – A built-in feature of fixed annuities and fixed indexed annuities in Florida that guarantees you won’t lose your initial investment—even if the market drops.
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Maturity Date – The end date of your annuity contract. When you reach maturity, you can begin withdrawals, renew the contract, or select a new annuity strategy for ongoing retirement income.
Types of Annuities
2025 Florida Annuity Market Trends
Florida’s annuity market is evolving fast — especially with more retirees choosing lifetime income over lump sums.
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Indexed annuities are now one of the most popular types in Florida, offering market upside with zero-loss protection.
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The average annuity buyer in Florida is now 62–67 years old, just as they enter retirement.
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More people are using annuities to roll over 401(k)s or IRAs — locking in income before market volatility hits.
With more options, features, and protections than ever, it’s no surprise Florida is one of the top states in the U.S. for annuity purchases.
Annuity & Retirement Planning Calculators and Tools
Annuity Guaranteed Income Calculator
About Fraser Allport
Fraser Allport is a Florida-based fiduciary and retirement income specialist. With over 43 years of experience, Fraser helps clients across Florida make informed decisions about buying annuities and securing their financial futures.
Schedule Your Complimentary Annuity Consultation
Ready to buy an annuity in Florida or learn more about your options? Schedule a free, no-obligation consultation with Fraser Allport today.
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