Legendary singer, John Lennon once stated, “Life is what happens to you while you are busy making other plans.” With the outlook of our future, it is significant to make plans in considering an annuity as your option.
Before deciding if an annuity is the best choice for your investment plans, take the first step in researching different types. What you will find is that there are many different types of annuities available that could be amended to suit your needs. However, the two most common kinds on the market are immediate and deferred annuities.
An immediate annuity provides you payment every month with an indicated rate of return from money you put up front. If you’ve received a large sum of money from a settlement, lottery winning, inheritance, etc. then this may be the best annuity for you.
An immediate annuity would guarantee the money you put in would be paid until your death. It would safeguard your profits for the future, which ensures a sense of security.
Deferred annuities pay monthly payments once you’ve grasped a set time or dollar total that you’ve paid in over a phase of time. So what you put in through the years basically determines what you can get out.
I’ve researched the payment types and found that the most commonly used are fixed and variable annuities. The best payment type for your annuity depends on your investment interests.
A fixed annuity provides a guaranteed rate of return over a set period of time. Fixed rate annuities, also known as retirement annuities, are common for investors that are close to retirement and protective of their funds. The fixed rate annuity fits the needs of the risk reluctant investor.
If your money is not drawn up in a low generated investment and the market is profiting, then the variable annuity would be your best investment. The variable annuity appeals to the investor that expects a high rate of return on their investment.
Variable annuities are coupled to another security, like mutual funds, that will bring a higher rate of return when the market carries it. The variable annuity guarantees a lower rate of return.
If you are considering making an annuity a part of your plans, then you should consider all your options. Do not let life pass you by before starting these plans for you future.
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