Annuity for retirement is one of the way to retire with confidence. As we all know that recent economic factors affect the way seniors spend their life. Most retirees ten to fifteen years decide to unretire due to economic reasons. They are forced to return to work or look for ways to earn a living when they no longer have enough money to sustain their needs.
It is important that as early as now, those who are regularly employed should understand that many things affect the lives of senior compared to younger generation. Younger people may not need budget for hospitalization and medicine needs since they are well covered by their insurance or health benefits from their employers. However, as you grow older, you will see that seniors may need hospital care, medications and other things and as a senior, you have to give money for these needs since it will no longer be covered.
To avoid serious problems and regrets how you handled your income when you are still lot younger, it is recommended that you put your hard-earned money to a good investment.
Annuity for retirement is often considered a practical investment, which may help you deal with your old age. For one, annuity is tax deferred investment plan, which allow you to save money even without any taxes. Most investment plans in the market will charge you with several kinds of taxes. Sometimes too many taxes will let you wonder if there will still be left for the interest charge when all the taxes are collected. However, with annuity, it allows you to save money without being taxed immediately. You will only be taxed when you decide to withdraw your money. The recommended withdrawal period is after seven to eight years. After that period, you may now choose whether you want to receive monthly stipends or one huge lump sum. Monthly stipends are like receiving your paycheck the same way you work before or a huge lump sum, which is one time pay.
There are several types of annuities. You may select from immediate or deferred annuity. With immediate annuity, you may start to receive money after your first payment. With deferred, you will have to wait for a minimum of a year up to eight years before you can withdraw your money.
The good thing for annuity is that it is inflated protected and principal protected. As inflated protected, the money that you will receive on the distribution period will allow you to live comfortably since the interest rate of annuity is the highest in the financial market today. Meanwhile as principal protected, you are guaranteed to receive almost the same price that you had initially invested. Most investment is affected when the market moves; you may lose a part of your money if you are not well informed if how the market works. However, with annuities, you will not lose any part of your money because of the protection that goes with the principal. Your principal is not affected regardless of the market downturns.
Likewise, annuities are easy to manage; you do not have to be financial guru to understand how it works. The annuity experts of your insurance company will be the one in charge where the money you deposited will be reinvested. All annuities are also regulated by Securities and Exchange Commission so you do not need to have any worries.
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