The Ultimate Guide To Annuities

Your One-Stop Resource for Retirement
How do I know if buying one is right for me?

How do I know if buying one is right for me?

Fixed annuities are usually the best option for those who want to be sure that their money will be enough to pay their expenses during their retirement years. If you are concern about having enough money, a fixed annuity could be a good way to forget those concerns...

What is a variable annuity?

What is a variable annuity?

The first thing to do is to learn the concept of an annuity. An annuity is a contractual insurance product that, as we said, are sold by financial institutions. The annuities are designed to provide a steady income for a period, therefore they are such an important...

What are its advantages?

What are its advantages?

Variable annuities are designed to give you a chance for long-term capital growth based in smart investments. By owning a variable annuity, you’ll be able to invest in anything you like, from half a dozen to twenty, or sub accounts that works like bond mutual funds....

What are its disadvantages?

What are its disadvantages?

Before buying a variable annuity, there are some drawbacks that you need to consider. For instance: The payouts will depend in the investments you choose, meaning: a higher investment risk. If the investments you make go down, your annuity will also go down, affecting...

When are variable annuities right for me?

When are variable annuities right for me?

If you want to control your investments and feel ready to do it, you may want to consider a variable annuity. It could also be a good alternative if you already reached the top of your contribution in your individual retirement accounts, which will also offer a tax...

Is a variable annuity a smart investment for my IRA?

Is a variable annuity a smart investment for my IRA?

This is a common move by sales agents, but generally is not the most convenient idea. One of the biggest benefits you get after buying an annuity is that your money will grow tax-deferred but you’re already get this benefit from Individual Retirement Accounts, so it...

What is an equity-indexed annuity?

What is an equity-indexed annuity?

Being a combination of both types of annuities, equity-indexed annuities are designed to offer you the advantages of fixed and variable annuities at the same time. Buying an equity-indexed annuity you will get a low-risk of investment and a guaranteed minimum return...

What are its advantages?

What are its advantages?

Equity-indexed annuities have the quality of paying a higher return than a fixed annuity without the risks of a variable annuity. By owning an equity indexed annuity you will have the chance of participating in the market to increase your gains but you will have a...

What are its disadvantages?

What are its disadvantages?

Before owning an equity-indexed annuity you need to acknowledge that these are very complicated systems that will come in several forms, this complexity makes them difficult to understand and without fully understanding them will be harder to take advantage of their...

How do I know if buying one is right for me?

How do I know if buying one is right for me?

This decision will depend mostly in if you’re prepared to meet the fees involved in an equity-indexed annuity. If you want the chance to increase your gains with investments but do not want that your guaranteed income fully depends on the volatility of the market this...

What is an immediate annuity?

What is an immediate annuity?

As you probably deduce from its name, immediate annuities start paying out immediately. These are often bought by people that are already retired. In immediate annuities, you give an insurer company a large sum of money and you will receive regular income payments...

How do I know if buying one is right for me?

How do I know if buying one is right for me?

If you’re concerned about outliving your money, an annuity could be a great addition to your retirement strategies. If you feel you have a high life expectancy and you want to secure an income source, you probably should consider the purchase of an immediate annuity,...

What are its advantages?

What are its advantages?

Since immediate annuities start paying out instantly, represent a great alternative for retirees to prevent outliving their retirement money. The biggest advantage of immediate annuities is that if they’re fixed annuities would be easier to incorporate into our...

What are its disadvantages?

What are its disadvantages?

The disadvantages of owning an immediate annuity will depend more on whether the annuity is fixed or variable. An immediate fixed annuity may cause the loss of purchasing power of the money you’ve invested. While immediate variable annuities may come with higher fees....

What is a longevity annuity?

What is a longevity annuity?

These are also known as advanced life delayed annuities and they offer protection against outliving your retirement money. If you buy a longevity annuity you will have to wait to reach around 80 years of life to start receiving payments. Once these payments begin, you...

How do I know if buying one is right for me?

How do I know if buying one is right for me?

There are three main question you must answer to yourself before buying a longevity annuity: does your family has a history of longevity? If so, do you have a -relatively- good health? And do you think there’s a chance you outlive your retirement assets? If the answer...

What are its advantages?

What are its advantages?

The main advantage of owning a longevity annuity is that you will be safe against something you can’t control: running out of money in your retirement years. For average retirees, to take 10% to 15% of their retirement savings to buy a longevity annuity will be as...

What are its disadvantages?

What are its disadvantages?

In this type of annuity there will not exist beneficiaries. In the event of your death, the remaining of your account will go to the insurance company. You should also keep in mind that the payments from a longevity annuity will not start until you reach 80 years in...

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