When looking to invest in annuities to achieve higher retirement returns

When looking to invest in annuities to achieve higher retirement returns, it can be a little confusing deciding on a plan to suit your investment style and requirements.  Understanding the three main types of annuities: variable, fixed, and indexed which can be classified into two main categories, immediate or deferred will help you to define your ideal annuities plan.  There are 7 main motivating factors that influence people’s decision to include annuities in their retirement investment plan.  Annuities provide many benefits over other standard investments as follows:

Annuities provide Tax Deferred Growth for Retirement

401k or IRA limits the amount to be invested whereas an annuity allows you to put more money into a tax deferred plan for retirement.  An added incentive for investing in annuities is that they are not taxed until you start receiving payments.  An early start toward your savings means you can put funds aside enjoying the additional benefit of receiving your savings in a tax-deferred annuity later.  You can end up with double the principal come time for your retirement payments as opposed to investing in a standard plan.

Annuities Can Provide a Good Return

Variable or Indexed Annuities give you the opportunity to invest money in the stock market, or mutual funds, with deferred tax so you are not paying tax up front.  You may see variable returns in the short term but can achieve a higher rate of return over time.  Fixed Annuities on the other hand act more like a bond, or Bank CD’s.  Although often seen as more of a conservative option, they can deliver a higher return than you would get from government bonds or CD’s, & other investments that offer similar security.

Annuities Can Protect Your Principal

Protect your principal with fixed annuities.  Fixed annuities allow you to benefit from today’s interest rates by earning interest while securing your finances when you need them for retirement.  Variable and Index annuities can also offer some protection of principal in the event that your insurance company goes bankrupt.  Depending on the state you live in $100,000-500,000 of your principal would be protected.

Annuities Can Provide Guaranteed Payments at Regular Intervals

Your income continues with fixed annuities.  As a retiree you can feel secure relying on a monthly income in the form of pre defined secure payments for a set period of time, or for life.

Annuities Can Give You Options Other Securities Don’t

Despite the variances between individual annuities – they all allow you to enjoy more control over your options.  Some annuities allow you to invest in the stock market, which may suit you if you want to invest in a more dynamic retirement plan with potentially higher returns.  If you are more conservative but still want to reap higher rewards from investing in fixed annuities you can choose annuities invested in the stock market, or stock index, with the option to switch over to a securer, low risk monthly payment annuity without losing your tax benefits, if stock market changes occur.   It’s a way to better leverage your retirement savings to maximize your return in your retirement years.  A little forethought now offers peace of mind – & higher income – when you retire.

Annuities Can Come With Inheritance and Gift Benefits

Who wants’ our loved ones to pay estate & death taxes before receiving their inheritance? Annuities received as an inheritance are probate free, estate and death taxes exempt.  They even allow you the opportunity to provide monetary gifts of up to $10k per year, per person, tax free.  If you choose to enjoy seeing your loves ones receive their tax free inheritance early – you can.

Annuities Can Allow for Unlimited Contributions

401k’s and IRA offer great retirement benefits  but, once you’ve hit your limits, why not increase your retirement savings by investing wisely in further annuities growing your tax deferred nest egg.  You have the option to invest as much as you want, as often as you want in annuities making your funds go even further towards ensuring the retirement lifestyle you desire.