Annuities are the foundation for wealth accumulation, wealth transfer, and retirement protection, providing the security of a “lifetime income.”
You will pay money into them for a certain amount of time and then, once they reach a certain date they will begin to received regular payments for a set period of time. Unlike other types of investments like stocks, bonds, or mutual funds, annuities are a guaranteed steady stream of income.
Annuities are a great source of supplemental income for those fearing their Social Security benefits might not be enough for them to continue their quality of life. Also, annuities have great tax benefits, the money in annuities grows tax deferred until you start to withdraw; and, once they begin withdrawing, only the gains made on the annuity are taxed.
How To Choose the Right Annuity – Start with your ultimate goal
Different annuities are designed to do different things. These different objectives can include:
- Conservative growth with no market risk and principal protection
- Income for life
- Legacy maximizing
- Long-term care protection
These are the 4 main reasons people purchase annuities. And different annuities will specialize in these different areas.
The annuity that is best at maximizing your guaranteed income for life, will very likely not be the best at maximizing conservative growth potential on your account value. This is why this is so important to have an expert to help you find the right Annuity.