If you are looking forward to a safe and secure retired life with a steady flow of funds to take care of living expenses, it is time that you thought about buying Annuities. Annuities guarantee a lifetime of income for the amount of money that you choose to invest and are basically a great way to secure your future financially so that the day to day stress of not having a steady source of income is lessened.
There are a variety of investment options in the market today many of which have a great deal of advantages. But often it is seen that such investment programs and employer sponsored schemes are greatly dependant on your contribution as well as time, which can be a major setback. But when it comes to Annuities, what makes the whole process so very appealing is that the returns you get out of it are totally tax free. Moreover, another beneficial factor of Annuities regarding their flexibility is that the amount in question to be invested depends wholly on the investor. The company which sells annuities will pay back a percentage of the invested amount to the investor as per the specifications in the contract. Use this tool to calculate your retirement annuity payout
You need to understand the basics of this investing scheme before buying annuities. In the first place, annuities are of various kinds depending on their duration and payout features. On the basic level, there is the Fixed Annuity which depends on a fixed amount of payment by the investor for which he/she will be getting a fixed sum as returns as per the clause in the contract. The interest gained will be low and so will be the risk factor too.
For those looking for more returns than that obtained in the predictable Fixed Annuity, they can go in for a Variable Annuity which offers more in terms of returns mainly due to the fact that the investors are putting their money in selected mutual funds of their choice which may yield high returns over time. Calculate annuity payments with the annuity calculator.
You need to be thinking of buying annuities at least about ten years prior to retirement time so as to make the most of your savings. It is imperative that you go in for the right plan as well as time with regard to investing in annuities mainly due to the fact that any miscalculation from your side would lead to loss in income and penalty too. For example, being tax deferred earnings that have been certified by the IRS, if you withdraw your investment before time or before you reach an age of 59 1/2, you are liable to be penalized about 8% of the amount. Similarly, once you have decided on the payment amount and it is recorded in the contract, there is no way of changing it without paying penalties.
Annuities can provide you with a stress free retired life and can help you live with dignity and self respect, knowing you never need to depend on your near and dear ones for money.