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Using Annuities for Retirement Protection Plans

Since the financial crises of a few years ago, most United States citizens have become wary of financial investments and are constantly on the lookout for products that can only guarantee specific amounts of return. Annuities for retirement or other purposes remain one of the few types of investments that offer guaranteed rates of return in addition to being tax-free. They have also competed favorably with traditional retirement plans and have even replaced them in some situations.

In simple terms, an annuity plan is whereby you invest lump sums or periodic payments of principal with an insurance company. Over the years, your principal amount grows at a fixed rate a variable rate in line with market trends, depending on the type of annuity plan you agree upon. The most common types of annuities are the fixed and variable annuities. Even after you begin to make withdrawals from your annuity plan years later, you will continue to earn interest on the total amount that remains with the insurance company.

Benefits of Annuities as Retirement Plans

Annuities have become very attractive as retirement protection plans due to its tax-free nature and a number of other attached benefits. Top on the list of these benefits is the fact that annuities offer a guaranteed rate of return and can provide steady income for retirees over the remainder of their lifetime. Most investors have gotten their fingers burnt by placing their funds in market driven stocks and bonds. With annuities, there are no such surprises. Also, there are no restrictions to investible amounts for annuities. So, retirees can lump all their retirement benefits, individual savings and even inheritances into annuity plans, which will generate large streams of income in later year.

The tax benefit of annuities is also very superb as the total amount invested is free from any tax liability. Even at the point of withdrawal, it is only the income earned on the principal that can be subjected to tax, while the actual principal remains intact. A combination of all these benefits has made annuities low risk investment highly admired b y retirees and even the younger folk.

Additionally, there is a specific type of annuity that even allows you to make withdrawals in as little as one month after investing you lump sum. This type of annuity is referred to as an immediate annuity. Generally, there are different types of annuity plan that meets the need of all segments of society. You can decide which annuity for retirement plan best suits your needs by using our annuity comparison and calculator tools.

To get started, enter your zip code on the top of this page, and then answer some basic questions. This will help you to compare annuity plans from multiple providers for FREE to determine your highest eligible rate. It is important to provide accurate questions to these answers as our pool of providers will provide you with different rates depending on your individual circumstance and situation.