Why Should I Get an Annuity?
Different ways can help your retirement savings to grow. At times, you might decide to invest in the stock market. But due to the market surges and dips, you might end up losing a significant portion of the investment.
If you are looking for safe and long-term investment growth, getting an annuity can be a good idea. It is because annuities offer protection against loss of initial investment.
What Is an Annuity?
An annuity is a contract signed by an annuity holder and the insurance company. As the annuity holder, you promise to make single or multiple payments, and the insurance company assures a guaranteed income in the future.
This source of lifetime income offers more protection than other financial investments. Even when there is downtime in the market, the insurance company will ensure the safety of your retirement income. When you are ready to receive payment, you can consider various ways depending on the type of Annuity.
3 Types of Annuities
- Fixed Annuity
Fixed annuities are easy to understand and can be predictable to generate various streams of payments. The insurance company gives a fixed insurance rate that could last for a year.
- Variable Annuity
A variable annuity allows investors to fund in the market, which leads to high returns. However, this Annuity is complicated when compared to the fixed Annuity. Thus, it is a good option for experienced investors.
- Deferred Annuity
A deferred annuity guarantees the investors income at a future date. It allows the income to increase before you start receiving the payment. But you can put off your payment as long as you wish. With this, you’ll be giving your money a lot of time to accumulate, leading to a considerable income.
Knowing the various annuity types and how they work will assist you in making the best decision. Choosing an annuity is determined by two factors: First, how do you want your Annuity to grow? The answer is that your Annuity can grow by investing in the market or by increasing interest rates. Second, how do you want to be paid? You have the option of receiving payments immediately after purchasing the Annuity or at a later date.
5 Reasons for Buying an Annuity
The first question that comes into many peoples’ minds when they hear about an annuity is; is Annuity a good investment? Many people find it challenging to understand Annuity because it comes in different types. But when you choose one that suits your needs, you will be sure to get a considerable income.
Generally, an annuity offers safety and long-term income. But the amount of income you’ll receive will be determined by the type of Annuity you choose.
Here are the benefits of getting an annuity:
- Maximum Protection of Your Investment
No one would like to encounter losses after investing. The good thing about an annuity is that it provides excellent protection for your finances. It offers protection when there is a downtime in the market and helps in investment growth when the market is up.
Many retirees consider other investments options such as a stock which places their funds at risk. Why don’t you go for a method that will secure your funds and grow the investment? While putting some retirement funds in the stock is a good idea, annuity retirement prevents excessive loss by assuring high returns.
- Guaranteed Income for Life
The retirees find it challenging to work to fulfill the needs of their loved ones. Although you might have saved money for your retirement, it cannot serve you for the rest of your life. But by considering a source of income such as an annuity, you will get a guaranteed payment for life.
For example, the fixed annuity amount does not change. As a result, even if the market fluctuates, your income will never drop. Furthermore, even after you have collected all of your expected earnings, you will continue to receive remuneration for the rest of your life. There is no other source of investment that can promise this.
- Long Term Care
No one can predict when sickness will occur. At times you might require care in a health facility that you cannot manage to pay. But with the Annuity, you will be covered. An annuity can be a lifesaver if you need long-term care.
Although some long-term care insurance can help you pay your hospital bills, it may expire. On the other hand, an annuity ensures long-term care by assisting in paying high-cost hospital bills.
- Annuity Beneficiaries
An annuity does not benefit only the investors. Your family members will be financially secure after you pass away. Many retirees have doubts about whether their loved ones will benefit from the Annuity after their death. But the truth is different types of annuities provide an option of getting a death benefit. With this, your family members will receive guaranteed payouts.
- Annuity Offers the Freedom of Choosing the Period You Want to Start Receiving Your Income
After you get your Annuity, the insurance company will ask you to choose when to receive your money. Do you want the income immediately after getting the Annuity? Or do you want the payment at a later date? It is up to you how you wish to receive the money.
You can select a particular series of payments after a given time, or you can opt for guaranteed payment in your lifetime. All types of annuities offer the freedom of getting lifetime income and accessing your money.
- Annuity Offers a Tax-Deferred Benefit
Why buy an annuity? This question comes into make policy holders’ minds when they hear about Annuity. Many investments require the policyholders to pay tax on what they earn. This situation makes them get little income. But an annuity is tax efficient. You’ll only pay tax after you remove all your money in the future.
Why choose an annuity?
Annuities are reliable and long-term financial investments, which are specifically designed for retirement. They provide different options for investors to choose one that fits their financial needs and goals. But if you have no idea of the type of Annuity to select, it is good to consider a financial professional. Green Bee Insurance offers different annuities in the Fort Lauderdale and South Florida area.
Contact us at 954-437-4082 to learn more about different types of Annuities!