While looking out for the investment options post-retirement, many people opt for Annuity Insurance as a major part of their portfolio. They are a safe way to protect the principal as well as to receive a good return on the investments at regular intervals for a specific period of time or for life. They have tax-deferred policy until the time of its payment. There are many choices that are available regarding their term length and payment schedule. Overall, they are segmented into three types – Fixed Annuity, Index Annuity, and Variable Annuity. Which one is better for you is dependent on your family and your financial condition.
In a fixed Annuity, the principal amount will be protected and along with that, you will receive a guaranteed rate of interest. These annuities are geared towards the retirement but with high liquidity. The rate of interest is usually between 3-10%. It is purchased through a one-time payment of front premium and that ranges between and 10 years. A variable annuity has a higher return than a fixed one but the risk is higher. It also provides the tax-deferred benefits. With this, you can invest in the mutual funds and the stocks. The indexed annuity is between the fixed and the variable. It provides a guarantee regarding the income and the interest and therefore, safer than the variable one.
Annuities for varied reasons
There were times when people used to wonder about their post-retirement lives. This wondering makes them think about the retirement plans, regarding how to manage life without income or how to arrange for healthcare and to pursue hobbies without affecting the finances. Most of the retirement planning wants to ensure lifestyle maintenance as used to be before. Mostly, people do this with the help of the pension annuities, which forms a part of their pay package. Many opt for the best rates of annuity in the market and then purchase the ones that suit their income and the lifestyle.
It is difficult to plan for retirement without the annuities. The main source of the annuity was the pension for many years. It was provided by the employer to the employee upon his retirement either as an annuity or as a lump sum payment. People purchase annuities because they provide varied options. If they are purchased at the best rates, they can easily be the main source of income for you throughout your life post-retirement. They are generally payments that are made at consistent intervals. Though the term denotes annual payments, yet these days the annuities are payments made on the monthly, half-yearly, quarterly, or yearly basis.
Manifold advantages of annuities
Regardless of the investment options, no investment plan shall give you that peace of mind in your entire life like the annuities. With so many different kinds, the contract is customized and they can suit the singles as well as the couples and it can prove to be a sound investment and moreover, it is to a certain extent tax-free. Through the websites, you can find out the best annuity rates and they provide the comparable quotes within a few minutes. All you need to do is to enter your details on the site and get the best quotes from the best service providers.