Considering A Retirement Annuity
When we are planning for our retirement, a fairly new option that we have to consider is called a retirement annuity
. This is an insurance product which is designed to supplement your currently existing retirement plans, such as your IRA, 401(k), social security as well as any other pensions or retirement accounts you may have. The idea of another tax deferred retirement account may sound great, but any financial decision is a major decision and you need to be sure it is what you need before you buy it.
What is it?
The annuity is an insurance product, much like any other product. You pay your premiums for a time, either in a lump sum or monthly. You will generally pay monthly until the insured event happens, and with a retirement annuity the insured event is your retirement. Upon your retirement, the policy is annuitized and you begin receiving payments from the account. These payments will supplement any other retirement payments you have, and an income tax will be taken out at this point on any earnings above what you have already put into it.
Why Should I Get One?
In tough economic times like we have seen, our traditional retirement plans may not be enough for us to survive on anymore. We may have taken on unforeseen debt in our attempt to recover from some loss, or our children may have needed our help which is draining our savings. If you have any reason to doubt that your current traditional retirement plans are not going to be enough to get you through your retirement, then a retirement annuity may be just the supplement to help you get through.
Your annuity can be used in any way you see fit, there are no restrictions. In this way, it is like working and collecting a paycheck, except without the stress and discomfort at the end of the day. We all have plans for when we finally get to stop working. Some of us have hobbies we would like to pick up or focus more on. Others may want to travel and see places they never had the time to see while they were working. Some of us just want to kick back and enjoy our families. Work has a habit of cutting quality time out of our schedules.
Whatever you want to do, a retirement annuity may by the perfect vehicle to use to accomplish the end goal. When you make your choice, be sure to make an educated one and choose the solution that is right for you.
by: Katherine Smith
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