Learn The Truth About Annuities
If you have been told that annuities are overpriced and serve no financial purpose, you have been lied to.
Annuities serve a very important financial need of many investors when they hit retirement. Annuities can fit very nicely into some investors retirement plans. Before closing off the idea of using annuities maybe you should determine if they fit for you.
Annuities To The Rescue
Before you retired, you did the math; you used a retirement calculator to determine how much retirement income you would need to cover all your financial needs.
However, some unexpected expenses came up after you ran your numbers through the retirement calculator. You now realize that you may run short and not have enough money from social security or your retirement investments.
You may want to look into an annuity. Many investors use annuities to supplement their retirement income.
Fear Not|Don’t Believe Everything You Read
Because of the bad press that annuities get many investors are afraid of annuities so do not even consider them as a resource for retirement income.
Many years ago annuities were overpriced. Nowadays insurance companies understand the important financial need of annuities during retirement so have changed their pricing structures; annuities are a lot less expensive.
Shop around; there are different kinds of annuities. Each type satisfies a different financial need and have different fees.
You should always read the prospectus of any investment before purchasing it; the same is true for annuities. The prospectus will detail the type of investments within that annuity, all fees that will be charged, important dates, cut-offs and deadlines associated with that annuity.
Which Type Of Annuity Would You Like?
An annuity is an insurance product. An annuity is a long-term investment that offers you a guaranteed stream of income. This is why annuities are used to supplement retirement income; you cannot outlive the money from certain types of annuities.
Annuities are one of the very few, if not only investments that offers you a guaranteed stream of income.
Fixed Or Variable
With a fixed annuity your principal and interest rates are fixed, or guaranteed. The date may also be fixed and fees may be assessed if you make withdrawals before that specific date. Read the prospectus.
With a variable annuity your investments are generally in mutual funds so invested in the market. Your earnings vary depending the upon market conditions of those investments. Read the prospectus.
Deferred Or Immediate
A deferred annuity means you pay into it today and receive payments from the investment at a later date. Your earnings grow tax-deferred until withdrawals begin; in other words your earnings are taxed when you start to make withdrawals.
With an immediate annuity your payouts begin immediately after you open the annuity.
What Works For You?
Annuities fit for some investors and not for others. You need to determine if they are the right fit for you, not your insurance agent, brother-n-law or your neighbor, but you.