Eric Stratton, on Mar 1, 2017 10:13:00 AM
Annuities are defined as being a contract that is between an individual and an insurance company. An annuity contract can provide a set stream of retirement income to the person on whose life it is based - who is also known as the annuitant - and that is in return for either a lump sum premium payment, or periodic premium payments over time.
There can be a number of advantages to owning an annuity, including the tax-deferred growth of the funds within the contract, as well as the potential for an ongoing income stream in retirement, with guarantees that are backed by the financial strength and claims-paying ability of the issuing insurer.
According to the Social Security Administration, a 65-year-old woman today will, on average, live to the age of 86.6, and a man who is currently age 65 may well reach the age of 84.3.1 So, if you plan to retire at age 65, or even at age 70, this can potentially still leave you with a lot of time to travel the world, visit with loved ones, and enjoy your favorite hobbies. On the other hand, it can also leave you a lot of time to worry about how you will continue to pay your expenses and how long your savings may - or may not - last.
A happy retirement can mean different things to different people. For example, while some may wish to travel the world when their working life stops, others are looking forward to starting a new business endeavor that they've always wanted to do.
While we all find ourselves dreaming about retirement at one time or another, as you actually get closer to that time, having a good solid plan in place can help you to ensure that you are moving in the right direction. It can also help you to avoid unpleasant surprises, such as having more financial outgo than income.
For many people, Social Security will make up an ample portion of their overall retirement income in the future. Even given all of the news regarding this program's financial issues, Social Security will likely still be here for many years.
Eric Stratton, on Nov 18, 2016 10:37:57 AM
Fixed indexed annuities, or FIAs, have grown in popularity over the past several years. This is due in part to these financial vehicles being able to provide ongoing retirement income in the future, as well as the opportunity to obtain increased interest growth over those of a regular fixed annuity. These product guarantees, of course, are backed by the financial strength and claims-paying ability of the issuing insurer. Fixed index annuity owners are also able to keep principal protected from market risk - even if the underlying index performs negatively. It should be noted, however, that any early withdrawals taken may result in loss of principal and credited interest due to surrender charges.
One of the primary features of an annuity is the stream of income that it can provide. Today, many people own annuities for the purpose of supplementing their other retirement income, such as funds from a pension and Social Security payments.
When purchasing various types of insurance coverage, you may also have the ability to add certain riders. A rider can be defined as an amendment to the insurance policy that will either expand or reduce the policy's benefits.