News from the Finance Office

Buying a retirement annuity is possibly one of the most positive moves you can make for your investment portfolio and your nest egg. It can provide the stability that comes with guaranteed retirement income that can also be adjusted for inflation should rates rise sharply anytime during the payout period of your annuity. In addition to sure payouts at set rates of return, you can also lower your overall tax burden because only the gains, and not the growth of your investment before you take distributions, are taxed. There are also no limits on what you can contribute to (and therefore, take from) your retirement annuity, in comparison to the deposit limits that 401Ks and IRAs come with.

Kinds of Retirement Annuities

Retirement annuities can be classified by the way the investor pays into it, or by the payout structure of the insurance product. Annuities defined according to investor payment include the immediate annuity (wherein the annuity holder pays a lump sum and is given guaranteed payments for a set period after that) and the deferred annuity (which requires a set of payments that, once completed, generate payouts for a certain time). Fixed annuities (which guarantee fixed returns) and variable annuities (that provide lower payouts than fixed annuities but have the potential to earn more according to market conditions) are the kinds of annuities classified by how these pay out.

Choosing an Annuity Provider

While your choice of annuity should depend on your financial objectives, personal circumstances, and monetary capability (among other related factors), such an insurance product should also come from a stable company to be sure you will receive the benefits you expect. If you already have a life insurance policy or similar product, you should consider purchasing your annuity from that same company; you may get better rates and service if you are already an established client. If not, do your research and canvass for different rates and annuities from multiple providers.

There are probably thousands of insurance companies that offer this investment, making your choice of provider a difficult one to make. The financial conditions of the recent past has also made it essential that you check into their track records, customer service, and stability if you want to receive guaranteed income for the rest of your life. Before you sign on the dotted line of your retirement annuity contract, determine the soundness of your potential provider by looking at their ratings according to sites like Standard & Poors or consulting with the National Association of Insurance Commissioners.

About the Author:

Katherine Smith is an author who specializes in financial topics concerning seniors. Puritan Financial Group provides seniors with retirement annuity information that can help them build bigger and stronger nest eggs. For more information on how Puritan Financial Group can help you, please visit our website at http://www.puritanlife.com/products/annuities.

Article Marketing

10 people like this article