Retirement and immediate annuities are two other types of annuities you may be interested to learn more about if you live in the Mesa area.
Basically, annuities are a useful planning tool for retirement for individuals who want to ensure they receive payments and have financial security during their retirement years. Ultimately, you invest in an annuity by putting money into the type of annuity you choose. The retirement annuity then makes payments to you in the manner you choose, either monthly, quarterly, annually, or in a lump sum. As the investor, you choose whether to receive payments for a specific number of years, or for the remainder of your life. Retirement annuities are extremely flexible, so you choose how the money is paid to you depending on your individual needs. A number of factors will affect the amount of your payments, including how much money you invest into the annuity, and the length of the payment period.
Many who plan to retire opt for a deferred annuity, which simply means you invest over a period of time prior to retirement; your payments are “deferred” until the point you begin to withdraw from the annuity. With some of today’s more advanced income riders on index annuities and hybrid annuities, you may also begin your income immediately without giving up access to your principal.
Immediate annuities are just as the name implies – after making an initial investment into the annuity, you can begin to receive payments. Many investors who are nearing retirement age choose to invest in an immediate annuity. Similar to a life insurance policy, immediate annuities are fairly straightforward. Also referred to by some as payout or income annuities, this type of annuity requires that you give the insurer a lump sum of cash, rather than making regular premium payments to an insurance company. You pay a lump sum to the insurer, who then makes regular income payments to you for 10 or 20 years, or until you die. Payments may continue if your spouse is still living.
Retirement and immediate annuities may be either fixed or variable, depending on whether you lock in an income stream for the remainder of your life, or divide your investment among various portfolios much like mutual funds in order to stay ahead of inflation.
Retirement and immediate annuities are a very complex topic for many investors, and it’s vital to thoroughly understand the type of annuity you are considering before you make a final decision. At Esure Annuity, our job is to help ensure you are making the best decision for your unique situation, a decision that will help ensure a financially solid future. Let us help cut through the confusion.
