Half of your worries vanish when you have guaranteed income per month without any hard work for the rest of your life. With that money, you can pay bills, spend to fulfil your needs. But what if you don’t have a pension? Here you can choose a suitable annuity as a permanent source of income. Moreover, it is the best way to save money for retirement. However, various types of annuities differ based on fees and purposes. So, it would be best if you choose it wisely.
Things You Should Know About Annuities
Here are some important things you should know about annuities.
1. Simple and Complicated
The annuity process is simple: submit a fixed amount of money at regular intervals or collectively, and after a particular time, you will start receiving money for lifetime. But the payback amount varies based on a few factors, i.e. insurer, age and gender. For example, a male person of age 65 receives $494 per month with an annuity of $100,000, while a female gets $469. The difference is based on gender because women live longer than men.
However, there are also complicated annuities like a variable, fixed, fixed-index, immediate and deferred. Moreover, many grants are here to pay your taxes or keep you safe from stock marketing losses.
2. The Seller and the Sales Person Matters
The monthly payback amount varies from company to company. So, it is better to concern a salesperson or consultant to avoid a wrong decision. They can suggest the best one according to your age and payback income annuity. The annuity stays with you for the rest of your life. Therefore it is better to choose it wisely and contact an insurer with a strong finance background like AdvisorWorld.com.
3. Types of Annuity
There are two main types of annuities, and the rest are their subtypes.
- The immediate annuity starts with payment, and payback stays for a lifetime.
- The deferred annuity starts after your chosen time. For example, if you know that till the age of 65, you can earn and manage your expenses, you can start receiving annuity payback after the age of 65 for your remaining life.
4. How is Your Money Invested?
There are three types to pay and receive money.
- In a fixed annuity, you pay the fee and receive a fixed amount for your entire life.
- In a variable annuity, the amount you receive depends on your chosen investment.
- Equity indexed annuity payback depends on the performance of that specific index.
Annuity is the perfect option to live a tension free life. However, if you plan to buy an annuity or are already a part of such investment, check it carefully to avoid bad results. A wrong step can take away all money you save for your coming life. Therefore, please choose the right annuity seller before it’s too late.