How You Can Use A Retirement Annuity
A retirement annuity is essentially an insurance policy for your retirement
. Like other insurance policies it is designed so that you pay a premium until the insured event occurs. In the case of a retirement annuity, the insured event is your retirement, and once that event occurs the policy annuitizes. You will cease paying your monthly insurance premiums and the policy starts paying you a monthly payment instead. You can pay your premiums one of two ways. You can choose to pay your premium in one lump sum up front, or you can pay it monthly over years.
The retirement annuity comes in three different flavors. You can choose low, medium, or high risk annuities. The low risk annuities offer a guaranteed minimum payout and guarantee that you would not lose any money. These annuities work like savings accounts or CDs, though the interest rate is almost always higher in the policy. High risk annuities are invested in an attempt to make more money for both you and the company you purchase your annuity from. They are not guaranteed and your annuity could potentially lose money. The chance exists to potentially increase your investment exponentially. Medium risk annuities are essentially a hybrid of the two other options. A portion of the money is in a low risk, interest bearing account. The other portion is invested. The returns would not be quite as high as the potential from high risk accounts, but the losses would not be nearly as severe should you lose money, either.
You can use your retirement annuity anyway you like. We all have plans for our retirement; hobbies we would like to pick up or places we would like to see. All those things we never had time for during our working years are now open and available to us. Ideally, your other retirement options will cover your living expenses, hopefully with a surplus. You are then free to use your income from your retirement annuity any way you like.
How wonderful would it be, in your retirement, to be able to do all the things you have always wanted to do? Travel the world, embrace that hobby you have always wanted to do or simply sit back, relax and enjoy your golden years. It is up to you and it is your money and your life. Your retirement annuity is a tools that is finally designed to work for you. After you have retired, life is finally yours, to live on your own terms and your own way. Enjoy it, you have earned it.
by: Katherine Smith
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