Best Annuities: Assessing a Fixed Annuity for Your Portfolio
As you age so does your income options. Eventually you will no longer be working. Many people look forward to retiring. Retirement is a time to look forward to playing with the grandkids and taking a cruise you always wanted. But you may not be able to do that if you’re worried about a monthly paycheck. Many companies provide retirement plans that include 401K plans but this may not be enough. A 401k only allows you to put a certain amount of money back against retirement. One of the things you might want to consider is a fixed annuity.
What Is a Fixed Annuity?
A fixed annuity is a way of saving money for retirement. You want to find the best annuity that will allow you to put this money back until you’re 60. This is a great way of adding to your retirement planning. A fixed annuity is an excellent option for creating a steady stream of payments want you retired. In a nutshell you’re giving yourself a regular paycheck. You don’t want to depend on a fixed annuity only for your retirement income but it’s a nice addition to your retirement portfolio. Often times this is used when your 401K has reached its limits. It’s always an excellent idea to have more than one source of income when you retire.
Guaranteed To Last a Lifetime
The nice thing about a fixed annuity is in its there as long as you are. There are many investments you can make out there that are only good for so many years and if you outlive them you take the loss. Fixed annuities are not that way so you’ll definitely want to get an annuity quote. The best annuities will calculate what you want to put in it and how long you’re expected to live and your income is based on that. If you live longer than they expect you still get your paycheck.
Tax Free Investment
Another great feature of fixed annuities is that it’s a tax deferred investment. Your annuity investment will continue to grow tax free until it’s used. The difference between a 401K and an annuity investment is you can put money directly into your 401K before it is taxed while with an annuity you pay your premium after taxes are taken out. You can also withdrawal your fixed annuity early but there are penalties usually around 10% and then they get taxed like regular income.
You will want to shop around and find the best annuities for you. Thoroughly check out the companies that provide fixed annuities. There are ratings systems that let you know what your risks are. And read the fine print. One of the major problems with things like this is hidden fees and charges that people don’t realize. Some of these charges are necessary and our fine when you know they’re there but you don’t want to get hit was something you were planning on. What you find the best annuities for you take action and make it part of your retirement planning.
John C. Ryan writes about choosing the best annuities for investors based on their individual goals and situation. For more information on choosing a fixed annuity see his blog.
