Tips to Shopping for Annuities
An annuity is investment that you make so that in future you can gain a regular payout from it. It is typically taken up from insurance companies. You pay them a lump sum or series of payments which they invest. The interest that is earned will accrue to your account and when a certain agreed upon period has past, you will begin to receive payments. This kind of investment is similar to pension savings and often used as supplement for it. Many retirees who receive lump sum pension payouts will invest in annuities to guarantee a long term source of income. One of the top benefits of doing this is that the interest accrued on this investment is tax deferred and is generally safe.
There are different types of annuities one can opt for. For instance those that start paying out immediately are called immediate annuities while those that start paying out after a set period are deferred annuities. You can also set a fixed period over which payments will be made or allow the annuity to run until the end of your life. The amounts being paid out can also be varied to take into account inflation or likely future health needs. Here are a few guidelines to ensuring you make an informed choice on your annuity.
· Understand the return and risk
Annuities are a very safe investment because they are insured and managed by stable financial institutions. The investments are also generally put into long term and very stable instruments like long term bonds. This in turn means that with low risk comes a low return. If you are looking to make a bigger return but still want to stabilize your portfolio, put some of your money in annuity and the rest in riskier investments like stocks and foreign exchange currency. Diversifying your portfolio is a good way to manage your risk exposure.
· Diversify your annuities
If you have plenty of money to put into annuities, consider carrying your options by having more than one annuity investment. You can further spread the risk by choosing different annuity products even from different insurance companies. They will all provide you with multiple income streams. Be sure to do your research to understand how different choices can benefit your changing circumstance.
· Plan for your spouse
If your investments are joint as couple, then take into account your spouse’s needs for the future, in case you do not survive him or her. In most instances it is women who outlive their husbands. Make sure that the annuity passes on and continues to payout to your surviving spouse.
In order to ensure you are making a suitable choice of annuity investment, browse as many options as possible ad determine the pros and cons of each one. Do not allow yourself t be pushed into investing by a smooth talking salesman. Seek out different opinions from such helpful sources as independent financial advisors. Even if you do pay for the service, you can get the right information to make an informed choice.
For further details please visit us at indexed annuity.
An annuity is investment that you make so that in future you can gain a regular payout from it. It is typically taken up from insurance companies. You pay them a lump sum or series of payments which they invest. The interest that is earned will accrue to your account and when a certain agreed upon period has past, you will begin to receive payments. This kind of investment is similar to pension savings and often used as supplement for it. Many retirees who receive lump sum pension payouts will invest in annuities to guarantee a long term source of income. One of the top benefits of doing this is that the interest accrued on this investment is tax deferred and is generally safe.
There are different types of annuities one can opt for. For instance those that start paying out immediately are called immediate annuities while those that start paying out after a set period are deferred annuities. You can also set a fixed period over which payments will be made or allow the annuity to run until the end of your life. The amounts being paid out can also be varied to take into account inflation or likely future health needs. Here are a few guidelines to ensuring you make an informed choice on your annuity.
· Understand the return and risk
Annuities are a very safe investment because they are insured and managed by stable financial institutions. The investments are also generally put into long term and very stable instruments like long term bonds. This in turn means that with low risk comes a low return. If you are looking to make a bigger return but still want to stabilize your portfolio, put some of your money in annuity and the rest in riskier investments like stocks and foreign exchange currency. Diversifying your portfolio is a good way to manage your risk exposure.
· Diversify your annuities
If you have plenty of money to put into annuities, consider carrying your options by having more than one annuity investment. You can further spread the risk by choosing different annuity products even from different insurance companies. They will all provide you with multiple income streams. Be sure to do your research to understand how different choices can benefit your changing circumstance.
· Plan for your spouse
If your investments are joint as couple, then take into account your spouse’s needs for the future, in case you do not survive him or her. In most instances it is women who outlive their husbands. Make sure that the annuity passes on and continues to payout to your surviving spouse.
In order to ensure you are making a suitable choice of annuity investment, browse as many options as possible ad determine the pros and cons of each one. Do not allow yourself t be pushed into investing by a smooth talking salesman. Seek out different opinions from such helpful sources as independent financial advisors. Even if you do pay for the service, you can get the right information to make an informed choice.
For further details please visit us at indexed annuity.