An unwise decision during heydays has cascading effects in the twilight years especially when it comes to making financial arrangement. Once we retire from job, the source of income becomes limited. We have to meet with what we get as pension. Unless and until we are pushed to the corner, we are reluctant to use our savings account. So, meager pension fails to close the chasm between the required and received. But for those who make the hay while it shines had better go for the deferred annuity to ensure easy going.
Like all other annuity varieties, a deferred annuity is too an agreement between the annuitant and insurer to ensure the best possible return on the investment. You can either make regular payment or at-a-time investment to buy an annuity. The choice depends on your financial strength and objectives. The insurance agencies guarantee the consistent flow of income after regular interval. The option of payment deferment of the deferred annuity policies helps your investment enjoy the extra growth during the accumulation period.
An annuity is a product sold to the individuals by the insurance agencies with an objective of earning profit. At the same time, the individuals buy the annuities for a better tomorrow. So, both the parties use the annuities for money-spinning. However, among all the annuities on offer, the deferred annuity makes the preferred choice for the customers. The annuitants are allowed to postpone the income payment and set a new date of income disbursement. As long as the money is not withdrawn, interest accrues to the investment fund, thereby making the income swell more with the passage of time.
A deferred annuity may be of two varieties - fixed and variable. Both have a unique set of pros and cons. So, prior to buying a policy, the individuals must have nitty-gritty of the advantages and disadvantages of both the policies. Fixed deferred annuity refers to a variety which is attached to a fixed interest rate during the growth phase of your investment. The fixed type brings you a guaranteed figure of income, comes hell or high water. So, whatever be the economic condition, you can always expect to get the same volume of installment throughout the specified time. Annuity calculator is a handy option to determine how much you will earn provided all the requisite details are supplied.
On the other hand, variable deferred annuity comes with different sets of interest rates. In fact, the interest rate is determined after feeling the pulse of the market scenario. Higher interest rate is paid when the investment fund is doing well. No wonder, you will have considerably lesser volume of interest if the financial condition is not showing the sign of promising growth in near future. In that case, you may have to rue your decision in investing in the deferred annuity. However, you will also get to gain a lot in the event of buoyancy in the market. Fixed type is the better choice for the risk-averting adults whereas the variable one is the best option for those who dare to invest risk for higher return.
Mike Anderson is a business consultant who has good information on annuity calculator and deferred annuity. For more information visit http://www.totalreturnannuities.com/
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