So you’ve decided to start saving up some money for retirement, but what do you do? The under-the-mattress trick may work for awhile, but it might be better off being deposited into an annuity account. Owners tend to demonstrate a unique loyalty and commitment to their annuity purchases, with 93% reporting that they still have their first one.
What are annuities?These are an insurance product in which people put money into over an extended period of time in order to, eventually, receive that money upon retirement. Usually a popular choice for investors who want to receive a steady income in their retirement years, people use them to manage their income better because the money comes in waves (once a month, once a week, once a year, etc.).
Types of annuities An annuity lump sum payment means that all of the money invested in the annuity is withdrawn at once. This however may not be the best decision because the owner will be substantially taxed and insurance company chances may apply if the money is withdrawn too early. Fixed annuities pay guaranteed rates of interest. A fixed annuity is usually the most popular choice for those in retirement.
Are there benefits to buying annuities? Yes. The money invested grows tax-free until you make withdrawals. One of the biggest advantages is that an annuity allows you to store away larger amounts of money without paying taxes.
Buying annuities Eight out of 10 non-qualified annuity owners have annual household incomes below $100,000, so be sure to check your financial situation before investing in an annuity. Most non-qualified annuity owners are also female, though if you qualify, it is always a good idea to do plenty of research before making the purchase.
Disadvantages Some disadvantages of buying an annuity include commission payments to the insurance brokers who sell the annuities, surrender charges if you withdrawal your money too early, and high annual fees if you invest in a variable annuity. Read more: www.sellmyannuity.net
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