subject: Annuity And Its Importance [print this page] Each and every one of us has certain aspirations, goals and dreams about our life and what we wish to achieve. Some of us may find that we are comfortably off with enough savings to last future generations but not all are blessed to be so comfortably off in the matters of their finances.
Annuities are an investment people make, in order to guarantee an income for themselves post retirement. It is a guarantee that they will have a certain amount every month until death or the amount may be given to someone else upon death like a spouse or a child.
Customers today however use annuity for a variety of reasons other than having a lifelong means of income. They use it mostly to gather a large amount of money as investment or to make large withdrawals at a later point of time in their lives.
The biggest reason people choose to invest in annuities is in order to have an income that will last them always. Despite being unemployed, it gives them a regular fixed revenue for their needs. This is a sort of pension plan that helps people receive lump sum benefits as well and there are tax deferred payments offered in some cases.
It becomes a popular option for many people to opt for such a choice in their day to day life. This is suited to individuals from all walks of life, especially post retirement. It is often a concern for people that they may outlive their assets or income, by investing in an Annuity they can ensure that they will have some funds that is regularly available to them based on the plan they choose to invest in. annuities are an opportunity that many people invest in as they are tax deferred until withdrawal which occurs only at retirement from a job.
There are multiple types of annuities available in the market and consumers can choose to invest in them based on their features and how it will fit their needs. There are fixed annuities which are the most basic type and has benefits for the spouse and children as well.
Then there are immediate annuities which help to postpone taxes and offers options in distribution of the amount and the type of contract as well. Variable annuities are the third type where the tax benefits also extend to the beneficiaries listed under the portfolio of investment and there are benefits after death as well.
Annuity premiums will vary according to the kind of benefits the client is looking for. The consumer can choose this plan based on it being a lifelong one, a deferred one, certain Annuity or any other kind according to what they feel is most appropriate and also what fits their budget best.
There are some considerations most people have about Annuity money, the primary being that it involves locking up a lump sum amount for a certain period. It cannot be withdrawn in case of some emergency medical condition or requirement that may arise. Shifting this capital into other newer investment areas is also not possible once locked in. But of course, the idea of locking it in is to generate a lifelong income and the benefits outweigh minor discomforts.
