If you are thinking of a stress free retirement, there are many several investment options. One of the best of should be immediate annuities. If you are looking for financial security in your sunset years rather than profit gaining or any other form of returns, immediate annuities may be one of the best forms of investment.
First things first, immediate annuity is a compensation plan where you pay an insurance company some amount of money in return for some money being paid back to you monthly or regularly for the rest of your life. The immediate annuity can be as flexible as you want it to be, so you have to make sure you have provided for any type of flexibility in your contract. With immediate annuities, you have the advantage of assigning the remainder of the principal to heirs and other beneficiaries in case you pass away before the principal is exhausted.
One of the greatest advantages of immediate annuities is that the percentage of tax you have to pay for it is very low, almost negligible. This is of huge advantage to those who want to make huge deposits because they will not have to part with large amounts of money in the name of taxes.
The fact that you will get an income for the rest of your life is a security that every retiree is looking for. No one wants to change the class of life they are living with retirement and with this kind of investment, you will be sure to maintain the same class for as long as you are alive. Immediate annuities are flexible, in the sense that you can opt to have payments made for the rest of your life or for some period of time. You are free to choose the kind of income you want, but you will be largely limited to the amount of deposits you make to the insurance company. Some people opt to take a small income at the beginning and increase it towards the end of the annuity to take care of increase in life expenses and inflation among other factors. The other option of taking care of inflation during the annuity period is to have an inflation rider with your contract, which will increase your income by some percentage over the years that you will be paid. The purpose of this will be to cushion you from any kind of market changes-you may have to part with much more to have an inflation rider, but it should be worth it at the end of the day.
Among the advantages of immediate annuities is that this kind of income cannot be taken away by your creditors to satisfy your debts, no matter how deep you are in debt. For many people who do not have much saved for retirement and whose savings may be taken away by creditors, immediate annuities is the best answer. Keep in mind though, that you should have only a small percentage of your life’s savings in immediate annuities.
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