Your Retirement Options Include Annuities

Posted on 23. Apr, 2011 by GuestPoster in Retirement

A question that everyone will have to deal with is what retirement plan will I use and which is best for me. You may have already encountered this question and answered it.  Hopefully you did so by looking at all the available options and even using a retirement calculator so you know exactly what kind of investments you need to make. The retirement option discussed below is an annuity and the benefits it has to offer over other retirement plans.

The main advantage that an annuity has to offer is the ability to contribute large amounts of money to the fund. Other retirement accounts such as 401(k)s and IRAs are tax deferred but they do not allow the investor to put away as much money as they want into the fund. Thus, more money can be put away for your retirement.  This is especially good for people close to retirement.

The investments you make every year are tax deferred and the interest is able to compound. This means a larger pay out for you when it is time to withdrawal your money. When you decide to begin taking money out of the account the contributed money is not taxed but your growth is taxed at a normal income tax rate. To see the amount of money you need or what you could have produced by an annuity you can use an annuities calculator.

When you are ready for payments to begin from your annuity you can have them set up over a specified amount of time or you can take the money as one lump sum. Most people who are going into retirement prefer to have the money set up over a date payout amount of time.

You can also choose from opting for fixed payments or variable.  Fixed payments give you a certain amount of money every time you receive a payment. Variable payments can change and are based off of how well the investment your annuity money went to is doing.

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Tags: annuities calculator, retirement calculator