An annuity is a contract between you and an insurance company. You may buy an annuity to get many valuable benefits, including the potential for a guaranteed stream of income in retirement – in some cases for as long as you live. An annuity may help you avoid outliving your retirement savings. Think of it as part of your plan for lifetime income.
Annuities offer a variety of benefits:
- Tax deferral
- Income in retirement – for a specific period of time or the rest of your life, if you choose
- Protection from loss
- The ability to transfer wealth to your heirs and avoid probate
- Can be customized with extra features, or riders, available for additional costs, that can help provide:
- - Guaranteed lifetime income
- - Enhanced death benefit
An annuity could be a good choice if you want:
- A source of regular income in retirement
- The ability to reduce the impact inflation could have on your standard of living
- Tax-deferred growth of your retirement savings
- A way to transfer some wealth to your heirs, while avoiding the costs and delays of the probate process
Different types of annuities do different things:
› Fixed annuities
Provide steady, or fixed, interest for a specified period of time› Fixed index annuities
Offer potential interest based on positive changes in an external index, but without actually participating in the market› Variable annuities
Give you the possibility of greater potential returns based on the investment allocations you choose, but they will experience market ups and downs, assuming more risk, and you could lose money*Guarantees are backed by the financial strength and claims-paying ability of the insurance company you enter into the contract with at that time.
Allianz
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