Which Annuity Is For You- The Immediate Or The Deferred?

It is certainly difficult to just walk into the bank and speak to an agent about the retirement plans, unless you have a little idea about that

. An annuity is mainly used for a retirement plan. It is interesting as such annuity plans have some great features of savings as well as insurance merged together in the form of an investment plan.

If you are planning for some investments to make your retirement financially secured, then you might have heard about fixed annuity as one of the options for investment purpose. If you buy a fixed annuity, it will definitely give you a good platform after your retirement. A fixed annuity plan is a suitable plan for many people who are looking forward to a stable post retirement plan. The best benefit of such a fixed annuity is that no matter how poor and unreliable the economic condition of the market is, the payments would not falter at all. Hence the name Fixed Annuity.

However, not all the annuities are similar to each other. There are two main types of fixed annuities which are: the immediate annuity and the deferred annuity.

If you are planning to invest in a deferred annuity, then you must know that you need to pay the same premium for a deferred annuity within the stipulated time period. The time period is usually until you retire from your employment. Once you reach your retirement age, you can start withdrawing money from your plans. A fixed and deferred annuity also offers tax relief until you start withdrawing from the funds. Therefore your investment grows more than the amount that you save in a normal savings account.

On the other hand, in an immediate annuity plan you need to pay a single huge amount for buying an immediate annuity. Once the contract is issued, you can start getting the benefits from the next cycle of payment.

Are you wondering which annuity is more suitable for you? Well, it actually depends upon your needs solely. Both kind of annuities have their pros and cons. Therefore, it entirely depends upon you to find out which is the one that suits you the best.

Before you buy yourself a fixed annuity, there is something that you need to ensure. Purchase your deferred annuities or any other fixed annuity from a good insurance company only. Since a fixed annuity involves a long term project, it is always wise to go for an insurance company that has good ratings in the market. There have been cases where some low rated companies of insurance who lures common people with good and high rates. But remember, that it is just a bait that they use to lure people into their trap. Do not fall for such baits as that may jeopardize your entire future.

Therefore, if you are considering a retirement plan, do consult a professional annuity expert so that you do not lose the savings on a whim that has taken so many years to build up in the first place.

by: Brad Lassyy

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