Annuities have been an investment option for many years, and they are a great way to provide guaranteed income. Annuities can be a good way for many people to save for retirement.
There are a lot of investment options for individuals and couples looking to invest. People have placed money into investments such as savings accounts, CDs, bonds, and stocks. In fact, none of these investments, have ever offered a guarantee of a profit. So-called “safe investments” such as savings accounts or CDs can only provide a guarantee that the original investment will be protected in case of a bank failure. In exchange for this, the return earned on these “safe” investments has not kept up with inflation.
Historically, riskier investments such as stocks have had much higher average returns. There is no guarantee, however, that any money invested in these type of products will be there when it is needed by the investor.
Annuities may be a good investment choice for anyone who needs guaranteed income and a good rate of return on their savings. In fact, there is a large variety of annuities available today. Typically, these investment products can be purchased through insurance companies. Annuities can pay either a one-time payment of money or guaranteed monthly income.
The most important aspect of annuities is that they are able to guarantee that both the principal and profit on an investment will be paid to their investors. Anyone buying an annuity is able to know exactly how much the investment will cost him or her, and also know exactly how much profit the investment will make.
Investors can choose from many different ways to pay for an annuity. Most people, however, will choose between paying money every month during their working years or rolling over their personal savings account or employer-sponsored savings plan. If an investor chooses to pay in small amounts, he or she can choose to receive back either a whole sum of money or a set of guaranteed, pre-determined monthly payments. When rolling over a savings account, most investors choose to receive guaranteed monthly income.
Finally, there are a lot of tax advantages to annuities, but these can vary based on an investor’s circumstances. Most importantly, though, annuities provide the knowledge that a family’s financial footing will be guaranteed no matter what happens in life. Be sure to research this investment option very carefully before making a decision.