Annuity Buyers – Which Is The Right Annuity For You?

If you’re thinking of joining the ever growing list of annuity buyers, then you need to understand the various options that annuities can offer you. There are so many annuities available to you. Buy annuity with care and some assistance! A qualified professional will help you understand them and find the correct one according to your personal circumstances.

Annuities, like so many other things, have different options in order to meet your needs. Some may be decided for you, such as how you are going to pay for the annuity, and some you may decide on.

Your first decision with an annuity is how you’re going to pay for it! With an annuity, you may either purchase it outright or in installments. Lump sum annuities are easy to comprehend. You put your money in all at once and then just watch it grow! However, you can also choose monthly payments, which allows those of us with a tighter budget to be able to afford it also.

When you consider buying annuities, you’ll find that there are three main kinds available to you. They are the fixed annuities, variable annuities, and the hybrid annuities. With a fixed annuity, you are guaranteed a fixed interest rate with your investment. Not surprisingly, this won’t be a very large number, but at least you can be sure that you won’t lose your principal, and you will still gain a particular amount of interest in return. Much like the old ‘Blue Chip’ stocks, you can be certain of a slow and steady growth.

Variable annuities are investments where your payments are subject to the performance of mutual funds that you get to choose from a list. You get to select the ones that you think will make you money, or you may allow the company to choose for you. There’s a big distinction with this type of annuity, if the market performs badly, you could lose all your money!

An hybrid annuity gives you some of the performance of variable annuities, but you also get a guaranteed minimum payment. This means that you are able to benefit from the market’s performance whilst also making sure that you won’t lose your principal. Your financial advisor will be able to offer you sound advice on these annuities.

You also have the choice of when you want to start drawing on your annuity; this is why it’s known as ‘annuitizing’. You may decide whether you want to be paid in a lump sum, or you could be paid over a period of time.

If you do decide on periodic payments, then you may choose to be paid for the rest of your life, and gamble that you live longer than they reckoned, without running out of your annuity funds. Or you could choose to take a little less and be sure that you, or your beneficiary, will receive payments for a specific number of years. You could even safeguard two people’s income by stipulating that the survivor keeps receiving payments, however, you can expect the monthly check to be smaller.

Annuities are often worded to sound fancy and confusing, it helps the companies to market their products. The big difference between the various annuities is how much they are going to pay you. In order to compare the annuities, inquire how much they will pay for $100,000 per month. This will help you choose which annuity will pay you the most.