What To Invest After Your Retirement
Annuities
Annuities are contracts between an insurance company and the policy holder, with the former guaranteeing a specific or variable return for the invested capital and making payments to the policy holder and/or his beneficiaries over a specific length of time, even a lifetime.
Annuities are contracts between an insurance company and the policy holder, with the former guaranteeing a specific or variable return for the invested capital and making payments to the policy holder and/or his beneficiaries over a specific length of time, even a lifetime.
The proper understanding of annuities in your financial planning
provides a significant benefit in the enjoyment of your retirement when the
time is right for you, now or in the future.
First, there are two basic types of annuities: Deferred or
immediate. Deferred: Lets your money grow until you are ready to retire (after
age 59 ½). The interest you make is tax deferred until you take money out.
Immediate: Provides income right away to you—as fast as within a month of the
start of your investment.
An annuity can be structured to resemble a fixed income
investment like a bond – adding to principle at a fixed rate – or as an equity
investment where growth is uncertain and based upon the performance of a
security index, such as the S&P 500. The benefits of annuities as
investments include:
The biggest advantages annuities offer is that they allow you to
sock away a larger amount of cash and defer paying taxes.
Unlike other tax-deferred retirement accounts such as 401(k)s
and IRAs, there is no annual contribution limit for an annuity. That allows you
to put away more money for retirement, and is particularly useful for those
that are closest to retirement age and need to catch up.
All the money you invest compounds year after year without any
tax bill from Uncle Sam. That ability to keep every dollar invested working for
you can be a big advantage over taxable investments.
In our brand-new free report, our retirement experts give their
insight on a simple strategy to take advantage of that can help ensure a more
comfortable retirement for you and your family.
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