Can an annuity be part of your goals

Retirement is to spend less time working and more time with your loved ones and doing what you love. It also requires that you spend money, housing, food, utilities and other necessities. And if you’re concerned about having enough money, are not alone. The savings in your plans or Individual retirement account may be affected by the ups and downs of the market. Since life expectancies are becoming longer.

Three guaranteed sources of retirement income

Fortunately, there are a few sources of retirement income that are guaranteed. One is a work of defined benefit pension plan and if you have one, you are among the few lucky ones, since they are becoming scarcer. Another source of guaranteed income is Social Security. It can be helpful, but is not designed to replace 100% of your income.

There is another way to ensure your income in retirement: with an annuity.

Kind of annuities can guarantee income for life when I retire?

Annuities come in different “flavors”, each designed to help you achieve specific goals. Let’s start with an annuity that is specifically designed to provide a source of income in your retirement, guaranteed income annuities.

Revenue – something slightly different annuities

Although income annuities share some similarities with their traditional counterparts, they are different in important ways. Income annuities are designed for the sole purpose of providing a guaranteed source of income, immediately or in the future.

An annuity for immediate payment is typically paid with only a premium or “pay by purchase” and requires the income payments to begin within 12 months once the contract has been made. Income can be guaranteed while living or for a specific period of time. Because immediate payment annuities guarantee a specific amount of income, limited access they offer retreats, and only by some annuity options. Even if you choose a choice of annuity that allows withdrawals, it is important to remember that take money out of your contract may have a significant impact on the dollar value of the future payments of annuities.

It would be worth considering an annuity for immediate payment if you are near or already in retirement, you need the security of guaranteed and predictable income, and if you need income to begin immediately. If you think that you are going to need the money in the future and have liquid assets additional limited, an annuity for immediate payment may not be the best choice for you.

On the other hand, a deferred annuity is designed to provide income guaranteed in the future. A deferred annuity, it usually allows various “purchase payments” for a period of time. In the date of annuity you choose, payments for purchases are combined into a single source of income continues while you are alive; some deferred annuities also offer options with specific periods. In this way, a deferred payment annuity can use to generate a source of future income guaranteed as of a pension.

A deferred annuity is different from a traditional deferred annuity in several ways. Usually, a deferred annuity:

It does not provide liquidity; There is no contract value or the ability to make cash withdrawals, such as in an annuity deferred traditional. The only time that will make distributions in a deferred annuity contract is when the annuity payments are made or when a benefit is paid by death.

Since there is no contract or cash value and guaranteed revenues are paid while you are alive, more longer lasting performance assets can be used to support the guaranteed revenue. That’s a deferred payment annuity can guarantee a future amount of income higher than a traditional deferred annuity at the time you make your payment purchase.

If you are considering a deferred annuity, it is essential that you have a source separated from liquid assets for emergencies. It is also important to get the correct information and talk with a financial professional that you trust.

Traditional deferred annuities – Save long term for goals such as retirement

‘Traditional’ deferred annuities are the type of annuity that you you already may be familiar. They are designed to help you accumulate assets in such a way that taxes are deferred while you save long term for your goals, such as retirement. We will see two basic examples of traditional deferred annuities: “fixed” and “variables”.

Fixed deferred annuities are “fixed” because they offer guaranteed and fixed interest rates. They are “deferred” because they require a waiting period before annuity payments begin. During that period, the money in your contract is credited with a fixed rate of interest and grows at a slow, steady rhythm. Your capital is protected while you make no withdrawals. Since the income tax current income in your contract you do not pay until you retire it, more of your money is available to benefit from stable growth. Fixed deferred annuities also offer annuities for income that provide income guaranteed for the rest of your life. This type of annuity typically includes clauses of retreats that allow access to the money in your contract. However, it is important to understand that withdrawals may be subject to fines of taxes and delivery charges, tax revenue.

It may be worth considering a deferred annuity fixed if you are looking for a conservative form of increasing portion of your assets and avoid the volatility of the market. I may not be the best choice if you prefer a higher growth potential (and don’t mind taking the risk that implies), or if you need income that begin immediately.

Annuity deferred variable – Unlike fixed annuities, variable annuities are to give exposure to the financial market. Variable annuities offer a range of investment options. Similar to a deferred annuity fixed, money in a variable annuity is tax-deferred. Do not pay current taxes on profits in your contract until they retire them. A variable annuity also offers a variety of options when it comes to receiving income, including income options for lifetime.

A variable annuity can increase or decrease in value, depending on how it plays the financial market. Considering a variable annuity, it is essential to understand how an annuity, including rates and associated costs. Equally important is to have a sense clear your financial goals and your tolerance for risk. A financial professional can help you make an informed decision about whether a variable annuity is right for you.

Which annuity should you consider?

That depends on many things. With an annuity, it is important to have the correct information before making a decision. Retirement is a reward for decades of hard work, part of that job is to ensure that you have enough money for the kind of retirement you want. If you are looking for an additional source of predictable income now or in the future, or a product that is designed to help you accumulate tax-deferred assets, annuities may be an option that is worth exploring.

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