Ways To Use Your Retirement Annuity
A retirement annuity is an excellent vehicle for funding or supplementing your retirement income
. We all want that day to come; the day we no longer have to work, that we can kick back, relax and just enjoy the rest of our lives. Chances are, you have your plans. Maybe you want to travel the world, pick up a new hobby or just enjoy some of the things you did not have the time for during your working years. A retirement annuity can be the vehicle to make sure that you can enjoy the things you never could before.
Usually, a retirement annuity is used to supplement other retirement options. Most of us will get social security, a pension, and maybe you invested in retirement accounts. If all is going as planned, everything from your traditional retirement will pay your living expenses. Ideally, you can use the supplemental income from your retirement annuity to enjoy the finer things in life such as your new hobby or traveling. Your retirement annuity, of course, can be used however you see fit once it has annuitized.
How do they work?
A retirement annuity works much like many other insurance products you have become used to. You pay the premiums from here until the insured event; in this case your retirement and once that date comes your policy starts paying you. With a retirement annuity, you receive your payments monthly, like a regular income check. You can budget just like normal, because you will know what the check will be every month.
When you buy your policy, you will be able to choose between high and low risk policies. A low risk policy works like a savings account. The money you pay in will gain a small amount of interest, but not very much. However, the lower risk guarantees that you will never lose money with this type of account. A high risk account might lose money, but the money you pay in is invested and could gain a lot more money than you pay in. You can compromise between the two, with a portion of your payment in a lower risk account and a portion in higher risk investments. You are guaranteed to not lose much money, if any, and you still stand the chance of possibly earning a lot more due to the investments.
A retirement annuity is an excellent way to fund your golden years, allowing you to do all of the things you have always wanted to do. Your annuity could fund you dreams of travel or a new hobby. Your retirement is your time to relax, your reward for years of hard work. Make sure you can enjoy it, and plan accordingly.
by: Katherine Smith
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