Why You Should Consider An Annuity

What is an annuity?

An annuity is an investment contract between a person and an insurance company that allows for the deposit of money that is managed by the company for the benefit of the investor. In return, the insurer makes payments to the investor over a period of time that is spelled out in the contract. There are several types of annuities (such as fixed or indexed) based on the type of investment involved. The advantages of annuities include tax deferral during accumulation and lifetime retirement income.

Which type of annuity is best for you?

There are several annuity options from which to choose including an immediate or deferred annuity or a fixed or a variable annuity. With an immediate annuity you make a lump sum investment and receive monthly payments almost immediately whereas a deferred annuity regular contributions are made over a period of time to increase the value of the annuity. With both immediate and deferred annuities you have the option of whether you want a fixed or variable annuity. A variable annuity carries more risk, but has more potential for higher monthly payments. A fixed annuity carries lower risk however the payout remains the same each month regardless of market conditions.

Before deciding what type of annuity you want to purchase you will need to consider your financial situation and long-term goals. Annuities can serve as a guaranteed complement to other retirement investments you may have. The experienced agents at Brooks, Todd & McNeil can help you find ways to save that best meet your goals for retirement.

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