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Spending a Good time after Retiring with Retirement Annuity Plan

Retirement is inevitable for most individuals, and it is good to know that after all your hard work through the years, you can finally relax and rest while spending time with the people that you love most. However, it is also important to ensure that you are able to enjoy this time to the fullest, without the fear that you do not have enough money because you no longer receive a steady income. An individual who wants to know more about this time in their life may shop around for the various options, and may want to know, what is annuity?

Annuity is an investment tool which is very suitable for retirees as it allows the individual to invest some money with an insurance company which will pay them after an agreed period of time. The payment could be made at once or in regular intervals based on a pre-determined calculation. The individual inquiring what is annuity should be enticed by being informed that in a retirement annuity, tax is deferred for the period when the income is accumulating.

Retirement annuities usually mature after retirement, and one should choose a plan that will meet their retirement needs. For starters, they could go for a variable annuity to be paid after retirement, and in this type of annuity, the investment is given the chance to grow or decline depending on the performance of the purchased subaccounts. It can be quite lucrative, and in the end, the investor who inquired what is annuity could get good rewards if they choose to purchase this type of retirement annuity.

There is always the option of a fixed retirement annuity, in which the growth rate is fixed and the returns are not as good as those in a variable annuity during a good year. However, the individual who enquired what is annuity should be advised that this option is safer as there is no risk of losing your investment.

Another beauty with a retirement annuity is that individuals are usually paid for life, meaning that there is no possibility whatsoever that they will live longer than their annuity. Therefore, payment for all the days after retirement is assured, and they never have to worry about lack of finances because this type of investment never runs out.

The retirement variable annuity also has another benefit which is known as a death benefit. This means that any investment left over after the death of the investor before payments is handed down to the beneficiary, who is usually a living spouse for the rest of their life. This is a relief to most retirees as it assures them that they will not pass away and live their beneficiaries with nothing.

Retirement annuity has a lot of benefits, however, the individual should do their homework before deciding on which company to purchase from, as well as the type of annuity to purchase. Each company has different charges and fees, and proper research will help the retiree settle for the best annuity provider out there.