Annuities are resources that you can use for a more stable financial future. When used appropriately, annuities provide incredible value for buyers. In addition to financial stability, buyers will feel secure knowing that they can be financially cared for as they live out the rest of their lives.
When not used appropriately, however, annuities can have the opposite effect on your financial future, becoming more of a road block than a support system. This happens when resources are not allotted properly, which happens more often than it should. Ask yourself these 3 questions before you decide to pursue the annuity route:
What is an annuity?
An annuity is a contract between a person and 3rd party (which more often than not is an insurance company). The relationship between the two parties is that the buyer will provide the insurance company with a payment and they, in return, are obligated to:
- send income for either a designated period of time or for life
- provide asset growth
- accommodate benefits in the event of death
There are two types of annuities: fixed and variable. Fixed annuities allow a person to start receiving income as soon as possible or after a certain period of time passes. As explained in the name, the principal amount is fixed. Variable annuities are riskier, but they offer various other benefits as a result. The principal varies depending on the performance of your annuity.
How do you know if you need an annuity?
First, you need to determine your goals so that you can begin researching the annuity options that would serve your specific needs. Next, I would recommend exploring other investment options that are not annuity-related as well. After investigating all of your available options, you can then compare choices and discover which preference would be most cost-effective for you.
How can you be sure that you are choosing the best annuity for you?
This is where working with a professional becomes imperative for your future. It is unlikely and inconceivable that you would know the ins and outs of annuities unless you already have previous experience working with them. Talk to a qualified finance professional about your needs and goals so that they can set you up with the course of action that will provide you with the most long-term benefits.
For all your annuity questions and concerns, contact Jan Gleisner. His firm’s primary purpose is to work with individuals to help them be more financially independent, as well as to set them up for a prosperous life after retirement.
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