Investing in one’s future is probably one of the best ways to spend your money. The working years should ideally be used to create a retirement plan that helps keep those golden years secure and free of financial worries. Most investors wish to put their money in investments that offer them flexible terms and conditions, good rate of return and tax benefits. And these are also the reasons why people prefer to invest in annuities rather than in any other financial investment vehicle. Annuities are contracts offered by insurance companies, wherein the investor pays a principal amount and is assured a certain rate of interest. Annuities have been around for quite a while and in fact can be traced to the time of the Roman Empire when citizens were assured a lifetime annual stipend in return for a one-time payment to the government. While the features of annuities may have undergone changes, it still strives to serve the same function: investment in one’s future.
Here are some of the top reasons to invest in annuities:
- There are many different types of annuities such as the fixed annuity, equity-indexed annuity, deferred annuity, etc. For the conservative investor the fixed annuity or the life time annuity would be ideal, while for a person who has decided to invest in annuities a little late in the day the immediate annuity would provide regular income for a fixed period of time or for the person’s lifetime. One can choose to invest in annuity by making regular payments or make a one-time lump sum contribution. Thus, annuities are ideal for all kinds of investors and whatever one’s financial needs and requirements, annuities are sure to satisfy them.
- Most annuities are tax-deferred, this essentially means that you don’t pay tax on the investment until you begin to receive income from it or withdraw money from it. And for people who receive income from the annuity after 591/2 years of age the tax levied would also be lesser. By investing in an annuity one can see their money compounding and growing at an excellent rate.
- The rate of interest offered by annuities is higher than that offered by CDs or by savings accounts.
- There is no limit on the amount of money one can invest in annuities and nor is there an age limit for such an investment.
- Annuities can be held jointly so that if one partner dies the other can continue receiving money from the investment.
- Annuities are a safe and secure way of investing your savings and as long as the insurance company is solvent you are assured of your investment and the rate of interest promised.
- For those who wish to benefit from the superior performance of the stock market and yet be assured a pre-determined rate of interest the equity-indexed annuity is an excellent option.
The top reasons to invest in annuities bring to light one important fact; annuities are ideal for each and every investor as they cater to their specific financial needs and requirements.