Annuities
Annuities are an interesting financial asset that can be quite beneficial if you go about it the right way. They are customizable so you can choose terms that work for you, and you can even leave it to a beneficiary should you pass. Read on to learn about annuities and see if they’re right for you!
What are Annuities?
An Annuity is an insurance product that offers consumers a guaranteed fixed income stream for the rest of their lives – and beyond. How does this work? First, you start with paying a premium to your insurance company. The premium amount is determined by the terms you agree to. This initial investment then grows throughout the term you set – usually between 10 and 30 years.
Once this initial term is over, you enter what’s called the distribution phase. This is when you start receiving monthly payments. If you purchase an annuity when you’re 25 and set the term for 10 years, then at 35 you start getting regular income payments! Alternatively, you can set the term for much longer and then count on your annuity to support your retirement savings. It’s also possible to set it for longer than you think you’ll live and name a beneficiary – commonly children. It’s a great way to complement a life insurance policy.
Risk Management
There are many annuity benefits but a big one is the elimination of risk. Yes, you’re making an investment. But since your contract stipulates a guaranteed rate of income, the annuity provider is the one taking the risk of a decline in the market.
The risk that comes with investing often holds many people back, especially when they can’t really afford to lose money. This is an excellent solution with no risk to you whatsoever.
Start Saving Today
If you’re interested in annuities and want to learn more about the different types, get in touch with us today and we’ll walk you through it. Get locked into an agreement you’re happy with and don’t worry anymore about where your retirement income will come from!
