Understanding the Importance of Annuities
Allied Senior Services agents can help you protect yourself from the risk of outliving your income. Retirement is an exciting and new adventure. You can prepare for retirement by making sure you have enough money to live comfortably. Our agency offers you the ability to buy annuities. Annuities provide financial security by maintaining an income stream even after you finish working. Annuities are a great addition to social security and investment savings. When these two things are not enough, the addition of annuities can be a great help in retirement. To learn more about your annuity options, connect with us now.
How Do Annuities Work?
An annuity works by creating a contract with an insurance company. This contract outlines the premium paid to the company and how the company will invest your money. There are typically two phases of annuity contracts: the accumulation and annuitization phases. During the accumulation phase, the company uses the money for other investments to build up the cash value of that annuity. Once you retire, the annuitization phase begins. You will begin to receive a stream of income or a lump sum payment. There are several different types of annuities that we offer our customers.
Deferred and Immediate Annuities
All the annuities that we offer fall into two separate categories: deferred and immediate. When you choose a deferred annuity contract, you pay a lump-sum premium to the company. This premium then grows tax-deferred and accrues interest during the accumulation period. The waiting period can last between two years and decades, depending on when you purchase your deferred annuity. The income payments begin on a date previously agreed upon and outlined in the contract. With immediate annuities, there is no accumulation period. The income payouts begin within a month after the annuity is purchased and pay you the same amount every time. Immediate annuities can be set in place for a lifetime of payments.
Fixed vs. Fixed Indexed Annuities
Many people choose a fixed or fixed indexed annuity when shopping for retirement funds. These annuities offer a guaranteed interest rate of return to you. The main difference between fixed annuities and fixed indexed annuities is the amount of that interest rate. With a fixed annuity, the rate stays the same. With a fixed indexed annuity, a guaranteed interest rate is combined with the opportunity for additional returns based on the stock market’s success. The fixed portion of an indexed annuity allows protection from low points in the stock market, but the index allows you to benefit at a greater rate when the stock market succeeds.
Prepare for Your Future
Annuities are a great way to financially plan for your future. When we are in the working period of our lives, we don’t often think about what will happen when the paychecks stop. Thinking ahead to our retirement stage allows us to ensure that we are financially taken care of. Ensuring that you have enough money to live happy and healthy throughout your whole life is important to you, so it is important to us. Take the time to go over annuity options with us today to better plan for your tomorrow. Call us now.