What You Should Know About Annuities
Looking toward the future with a cautious, wary eye is to be expected. With so many questions concerning what will happen to us when we retire and what types of resources will be available to help us, we want to prepare as best we can for every eventuality. Purchasing an annuity-investing funds in exchange for guaranteed income payments at regular intervals-is a great way to fill in the gaps of your savings portfolio. Most often used for retirement purposes, annuities guarantee benefits, such as tax-free growth, the ability to pass money directly to heirs or charities, and a secure income stream in later years. You can even convert some life insurance policies into annuities by taking the cash value of the insurance policy and buying the annuity contract that best suits your needs.
Whether you need an annuity to supplement monthly income, provide long term growth or if you have other financial goals or purposes, picking the right one is a big decision. Ask for a free-look period to review the contract to ensure you have made the right decision. Talk to us about which annuity would be most appropriate for your retirement portfolio.
Here are some key factors to consider when it comes to determining if-and what kind of-an annuity is the solution for you.
1. Know Your Interest Rates
Doing a little research to compare interest rates between annuities can save you a lot of money and hassles down the road. Some rates start out high, but get lower after the first year. Look at the base interest rate, which is the current rate less the bonus rate. The current rate is the rate an annuity is paying over a specific, guaranteed length of time, set by the insurance company at the time of issue. The bonus rate is extra or additional interest paid during the first year-or initial guarantee period.
Cover all your bases up front by asking us any and all of the questions you may have. Finding a favorable interest rate will go a long way toward making your golden years that much more enjoyable.
2. Familiarize Yourself with Surrender Charges
Some annuities penalize the early withdrawal of funds with surrender charges. That's why it's key to recognize that most annuities are beneficial to you only as long-term vehicles. You may need to remain in the annuity long enough to avoid paying any surrender charges if you need to withdraw money.
Most annuities let you withdraw interest from your annuity without penalty. Many annuities also allow you to withdraw up to 10 percent of the account value before a surrender charge or withdrawal charge is applied. See if you can arrange a bailout clause that would allow you to withdraw your money without penalty if your financial circumstances changed because of your health.
Knowing the rules of your policy will help you avoid unnecessary expenses.
3. Investigate Administrative and Maintenance Fees, and Other Details of Your Contract
We are willing to answer all of your questions when you're looking into an annuity. What are they, exactly? How do they work in your favor? Why types of administrative and maintenance fees will you pay?
You'll want to make sure that the firm you work with isn't limited to simply offering one company's annuities. There are a host of options and details to consider, so we can assist you in navigating through all the fine print to locate the right annuity for you. Fully understanding all the aspects of the annuity is crucial for ensuring a safe, secure financial future.
4. Choose the Best Annuity for You and Yours
Do you need an equity indexed, fixed rate or variable annuity? Find out about the particular annuity you are considering by reading the prospectus and the required disclosure material. Each type has distinct advantages, but some of the benefits to consider include period payments; investment options such as mutual funds, bonds or money market instruments; death benefits; and tax-deferred payments.
Recognizing that the account value may decrease if the underlying mutual fund investment options perform badly should be a signal to you that you need to learn more about the investing habits of the company you choose. How secure are they? How diverse? No one can predict the future, but the more information you gather, the better you will be able to determine how stable you will be upon your retirement.
As your direct source for the best annuity rates, DirectAnnuities.com can help you reap optimum benefits from annuities. We pride ourselves on a hands-on approach to annuity guidance and the ability to keep you focused on your financial future. We understand that education and understanding of your current situation is vital to successful, prudent decision-making concerning your future financial condition.
Browse our site for more information or contact us at 1-866-DA DOT COM (323-6826) for further details.
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