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Choosing Between Immediate Annuity or Variable Annuity

An annuity is an insurance product that is a retirement strategy. Annuities are in demand by investors desiring to get secure income after retirement, be it in amounts in bulk over a certain time without any associations with market fluctuations, or plans which pay according to ups and downs in the world’s financial scenario. First, what are the available options to investors? If I am a prospective investor, I may avail an annuity which may be fixed or variable as mentioned before. They may also be deferred or immediate. A deferred plan waits and builds up my return structure after my retirement, till the time I actually need its assistance. When I take the help of an immediate annuity quote for a financial future, I start receiving returns irrespective of whether I do have another source to pay my bills or not. It may be perfect if I am already struggling with my income and have no other options or retirement solutions.

On the other hand, if an immediate annuity does not suit me, I may wait till I really want to retrieve help. For people who do not anticipate an extremely long life (which is exactly what the principle of annuity delves upon), a fixed annuity may not pose a problem. But if I do, and I retrieve a fixed and immediate annuity, I may have very less left to provide myself with, when the value of the prefixed amount of cash buys virtually nothing, say, 35 years later. In other words, inflation may pauperize me. An immediate annuity quote begins early, which means it leaves less for later years. A variable annuity solves the problem of lower market worth.

Unlike their fixed counterparts, variable annuities are designed to pump up savings by giving a chance for long-term capital growth. Because of the growth potential, a variable annuity may be more likely than a fixed annuity to outpace inflation. Of course, it is not without its attached problems. It may increase my income over the years, but on the other hand, it may reduce it as well. Monthly fluctuations may not be a good option for many, especially if I like to plan my expenditures beforehand. The question of exact budgeting does not arise if I do not know what amount of cash I will have in hand. If unfortunately I die too soon, I will not have the optimum benefit of my investment for I could have well served my purpose by opting for fixed monthly returns.

Therefore, if I want my money to flow in fixed amounts regardless of how long I live. I believe it would suffice me- an immediate annuity may be a good option. But if I know my finances well and I may live to a time when inflation may burn out everyone’s notes, I’d be wiser if I trust a variable annuity quote.

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