The Best Annuity Type
If you are ready to choose an annuity plan, you want to select the best annuity type available. However, it pays to make your decision on the basis of what the best annuity type is for your particular situation. Different kinds of plans are appropriate in difference circumstances.
Annuities are available in two major types: immediate and deferred. The chief reason you would want to choose an immediate annuity is to ensure that your income will last for the entirety of your lifetime. The major reason to pick a deferred annuity is so you can accumulate funds on a tax-deferred basis until you withdraw money from the plan.
General Benefits of an Annuity
There are pros and cons associated with every type of annuity. In general, an annuity program offers the advantages of security, flexibility, and low risk. Additionally, there are tax advantages associated with making investments in annuities. The choice among available options should be based on your actual needs and investment portfolio.
Deferred vs. Variable vs. Income Annuities
Fixed deferred annuities are the best choice if you want a guaranteed interest rate, the benefits of tax deferral, can afford to keep your assets in the plan for at least five years, are saving for your retirement and want to convert these funds to future income.
Variable annuities are appropriate if you can set aside a substantial amount of assets for ten or more years, are looking for tax deferral benefits, and are saving for retirement. You may also want to convert the annuities into income in the future as well.
Income annuities may be your best option if you are already retired or close to your retirement, want a guaranteed income in retirement, have a lump sum or rollover amount you can convert to an income stream, and are worried about living longer than your income will last.
Research and Compare
Do the research before investing in any annuity. Ascertain which type is right for you (fixed, variable, or equity-indexed) and be sure to compare contracts from various brand name insurers. Continue exploring Annuity Types, or, if you'd like to compare actual quotes from insurers like Metlife, ING, Prudential, and more start your free annuity quote:
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