Annuities Are Boring - They Are Safe and Secure

There are many types of annuities on the market and it may be confusing to a potential annuity buyer to find the best annuity for their particular needs. Annuities are boring however, they can be safe and secure for your retirement money.

Safety of Principal

Many people want to make sure their retirement nest egg is there when they need it. Fixed and indexed annuities guarantee your principal without any fees to do so. Now, you will not get rich with these annuities by any means but you will not lose your accumulated value either. Most of these annuity terms range between 5-10 years in length.

Liquidity

All deferred annuities offer various forms of liquidity. Some of these annuities allow for up to 10% penalty free withdrawals every year for the life of the contract. You may also be able to take out interest only from these annuities without incurring any penalties. Fixed, indexed, and variable annuities allow you to take an income regardless of how many years you live, this is called annuitization. You can also choose different annuitization options or length of payments. Some people want to annuitize their policies for only 10 years, other want lifetime income.

Immediate annuities allow you to choose how long you want your payments to be made. You have many options including 10 years only or 10 years and life. Some people choose the life only option will pay you an income for as long as you live. Check with an expert for quotes.

Probate Avoidance

All deferred annuities avoid probate. Your money or accumulated value will pass on to your heirs and they cannot contest your wishes. Some annuity owners prefer to have their accumulated value paid out yearly or monthly to their beneficiaries but most owners allow for 100% distributions to their heirs.

Tax-Deferred Growth (Deferred Annuities Only)

Investors have two choices. You can pay taxes on your money or you can choose to defer paying taxes on your money. If you are not using your money, why pay taxes on it? A deferred annuity solves this problem because your gains are not taxed as income. Certificate of deposits require you to pay taxes which decreases your yield on the CD.

As you can see, annuities are boring but they offer safety and security to the policy holder. Consult with a qualified annuity expert who will recommend the best annuity for your particular situation.

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