Different Types Of Retirement Annuities
Retirement brings several insecurities with itself
, either it is in terms of mental peace or financial instability. Without having any need to take mental or physical pressure, the old aged individuals receive their pensions at the end of every month. This is only one facet of the overall scenario, which is visible to all. But there is another insecure aspect which remains hidden in the light of the first convenience that the retirees get. This so called 'another' aspect is concerned with the financial worries, which they suffer from because of the trivial pension that they receive. To increase the amount of pension, however, retirement annuities are the schemes that help a lot.
Retirement annuities are the deals that are actually the contracts between the individuals and their insurance companies. The individuals, when young, do not bother about saving money. They spend money like anything in buying luxury items for themselves. Lack of savings subject them to receive trifling amount of pension which is proportional to what they have saved for their entire service life. However, the scheme of retirement annuities give them a chance to save a particular percentage of their monthly income, in order to receive a handsome amount of money after retirement.
Types of Retirement Annuities Plans:
Fixed annuities: This is a plan that gives an individual an opportunity to choose a deal based on his requirements, either for a specific range of time or for lifetime. The main benefit of this scheme is that it is free of any kind of tax till the amount is withdrawn. The fixed retirement annuities offer an individual a guaranteed principal amount. No stock market risks or any type of fluctuations is involved, which might lead to decrease in the value of your annuity. This makes it even more convenient option for the retirees.
Immediate retirement annuities: Whatever you save throughout your service life forms the source of cash inflow in this case. Significant portions of your retirement savings are offered to you in the form of monthly payments for lifetime after you retire or for a specific time period as per chosen by you. These
retirement annuities are, surely, amazing schemes, but they are of no use in case of emergency. When you need them in an urgency, they are tough to be encashed.
Deferred retirement annuities: The significant contributions that you make during your service years serve to be the basis of using these retirement investment annuity products. These contributions that you make, being an annuitant, are in exchange for a scheme, which assures you an agreed income during your advanced retirement stage. Investment that you make in this respect can either be done in lump sum or using other modes. However, as soon as you retire, you need to withdraw some amount of money within thirty days upon retirement, which must not exceed ten percent per year.
Variable annuities: If an annuitant is willing to risk the fund and invest in stock market and other bonds, variable annuities are great alternatives for him. Risking it may increase the value of your retirement annuities, if you gain profits, while it has equal chances of incurring loss, which could easily reduce the amount that you are subject to receive.
Based on the pros and cons of the
annunity deals, you can make your selection, keeping in mind your future needs and requirements.
by: Brad Lassyy
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