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How to find annuities

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Are you new to the investment world? Are you old to the investment world? No matter if you are new or old, there is a lot that can be learned when it comes to investing. Many people know and understand how to invest their money correctly while others struggle due to lack of patience and other things. When it comes to investing your best option is to have a diversified portfolio. This will allow you to have plenty of money to turn to all the time as you have something giving you short term investment returns and the ones offering you long term returns for your retirement.

What is an annuity and what does it mean? An annuity is a little different from your other investment as you will have money send to you over regular periods of time. These payments will be an equal amount and they come after a certain amount of time has passed. This is pretty common when you are talking about pensions as the money will come quarterly, biannually or annually.

Annuities are sold by insurance companies and many others as a way to provide the client with a payment amount but not all at once. This will help to avoid a lot of the large lump sum amount required by them and it will be able to give you money that you can choose to pay taxes on now or later. Typically with the annuities you will be talking about paying taxes on the money once you have extracted the money from the account.

How can you purchase an annuity? You can choose to set it up in installments or to buy it with a large lump sum. It really depends on what you can afford. Then you will have the money paid out over a lifespan, which is pretty common for life insurance policies or you can have it given directly to an individual. Finalizing the deal will allow you to see what the exact terms are so that you do know what is covered and what you need to concern yourself with.

There are 2 types of annuities you can choose from, fixed or variable annuities. This has a big impact as to when you are eligible to collect your money so you really need to read up on the fixed and variable annuities so you can make a good decision. Here is a brief look at the difference between a fixed and variable annuity:

  • Fixed annuity - this type of annuity will offer you a minimum interest rate and will give you equal payments when you are able to withdraw money from the annuity.

  • Variable annuity - for this annuity you are able to have no assurance when it comes to reimbursements. Your income on this type of annuity is going to vary so it's hard to know what to expect.

As you meet with your financial advisor about the type of annuity that you should choose make sure you go over all of the terms. They will also talk to you about your personal desires when it comes to choosing a deferred or immediate annuity. Deferred annuities are great if you don't need the money for awhile and you do not have a problem with it sitting for a long-term investment. Anyone that is in need of the money in a hurry needs to opt for the immediate annuity. Watch for penalties if you do withdraw the money early from your annuities. Typically you have to wait until a specific age or maturation date as to when you are eligible to withdraw the money from your annuity.


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