annuities

Well, first things first: What are annuities? Here's the simple answer:

If you purchase an annuity, this means that you are investing money now, so that you may receive payments later. Think of it as buying a fixed monthly income for the future.

Annuities used to be considered too expensive and complicated for most people. But in past years, they have undergone a renaissance of sorts and are now available at reasonable rates to just about anyone. They've become an increasingly popular way to plan for tomorrow.

Some of the benefits of purchasing an annuity include

• Any monies gained go untaxed until their time of withdrawal, allowing for faster accumulation.
• Guaranteed money that you will have later in your life.
• The ability to take charge of your money and future with flexible investment options.
• Unlike many traditional retirement plans, you can invest as little or as much as you like in an annuity.

Annuities are often purchased from an insurance company, mutual fund, or some other type of financial organization in one of two ways:

• One lump-sum payment: This option is often chosen by beneficiaries of life insurance payments or those who don't want to deal with the hassle of ongoing payments. However, contracts that are drawn up for this type of annuity are often inflexible.
• Multiple Payments: Payments made over a period time. You don't need large sums of money to own this type of annuity. These days, annuities can be purchased for as low as $50 a month.

There are many types of annuities (fixed annuities, variable annuities etc) for many types of people, so read through our helpful explanations on other pages and make sure you shop around.

 

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