What Retirees Should Know About Annuities

What Retirees Should Know About Annuities

Annuities Greenwood Village COAnnuity Information To Guide You In Retirement

An annuity is an insurance that pays you an income. This can be extremely useful as a retirement strategy if you want a steady stream of income throughout your retirement. You make an investment and you then get payments for future set dates or a set number of years. Keep this information in mind to see if an annuity could be useful for you.

Advantages:

  • One of the biggest advantages of having an annuity is that you can set away a larger amount of cash and defer paying taxes on it. Unlike 401K’s and IRA’s there is not a limit on annual contributions for an annuity, which can be useful if you want to put aside more money for retirement to catch up before you actually retire.
  • Another advantage is that what you invest compounds every year with no tax bill, allowing you to keep your investment working in your favor.
  • Lastly, when you cash out on your annuity, you have options. You can take the entire lump sum of money or you can set up guaranteed payments for an amount of time that you choose, even for the rest of your life, which can provide a steady income for you in retirement.

Two Types Of Annuities

  • Deferred Annuity: With a deferred annuity, your money is invested and it accumulates until you are ready to begin withdrawing from it, usually in your retirement. You can turn your deferred annuity into an immediate annuity when you are ready to start receiving payments.
  • Immediate Annuity: When you choose an immediate annuity, you start receiving payments soon after you initially invest. This can be a good idea as you near the retirement age. This annuity starts paying you instead of accumulating money.

This basic information about the advantages and types of annuities can help you figure out whether an annuity is a good idea for you as you retire. Contact Employee Benefit Plans Inc. in Greenwood Village for your Colorado insurance needs.