Should You Be Investing in an Annuity?

Often people ask why they should invest in an annuity when they will have income from Social Security after retirement or have an employer sponsored pension fund. The answer is that firstly the income from these sources is just not enough to cope up with the rising prices and secondly they may not be able to keep up your current lifestyle. Also employer sponsored pensions funds could stop if you lose your job or change jobs. Investment in an annuity is one of the best investment decisions that any working professional, and for that matter even a retired person can make.

Annuities are long term investment contracts that are offered by insurance companies that promise returns on the money invested by the investors. Since annuities are state regulated they are considered as safe investments, and as long as the insurance company is solvent the annuity investment is secure. The two main features that people look for in long term investments are security of capital and good returns. Selecting an annuity assures you of both. An investment in an annuity is a good idea for each and every person, without any exception. The reason being at some point or the other we all want to retire from our working lives and without the surety of a regular source of income that will help you live comfortably retirement may not be possible.

Here are some of the common reasons why millions of investors select an annuity as their long-term investment.

Annuities promise investors of a certain rate of interest on their investment and guarantee a regular source of income for life.
An annuity can create a retirement fund that will supplement other sources of income after retirement and assure financial stability and keep your retired life stress free.
There is no limit on the contribution that one can make to an annuity.
There is no age limit for buying an annuity.
Annuities can provide income immediate or the income can be deferred.
The versatility and flexibility of this investment vehicle cannot be surpassed by any other long-term investment.
In case an investor has second thoughts about his annuity investment and wishes to change to another annuity, this is possible.
Annuities are tax deferred and thus unlike other investments such as CDs they are not taxed yearly but only when income is received from the annuity or when an early withdrawal is made. Thus the annuity gains are calculated by compound interest.

Thus the answer to the question, “should you be investing an annuity?” is a strong yes, and one that needs to be seriously considered by everyone who is worried about their savings outliving them or about never being able to retire for the want of enough money and financial stability.

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