What Is an Annuity?
An annuity is a relatively low-risk insurance product that pays you money, either for the rest of your life or for a set number of years. They are a popular investment option for anyone who wants to have a steady flow of future income, especially as part of their retirement plans.
Annuities generally earn a higher interest rate than other comparably safe investment options. They also provide tax-deferred growth, so you won’t pay tax on the interest you earn until you withdraw the money.
An annuity can pay you a guaranteed income for as long as you want
You can structure your annuity to pay you monthly checks for the rest of your life or for a specific period of time.
No matter how shaky the economy gets…how unpredictable the stock market is… an annuity can give you a guaranteed income stream for the rest of your life.
If you have ANY worries about outliving your savings during your retirement years, the safety and stability of an annuity may be an appealing option for you.
Annuities in an uncertain market
After the meltdown in the stock market and real estate markets back in 2008-2009, we have witnessed a pretty amazing comeback.
But lately, the markets seem to be saying that we are now in for a volatile period. If you can sleep nights while your assets are losing huge chunks of their value on any given day, maybe it’s no big deal.
Some people, though, have had enough. They have moved their money into investments that are not subject to stock market fluctuations such as certificates of deposits (CDs), savings accounts and money markets. They believe in the mantra: “Whatever you do, DON’T LOSE MONEY!” And that works well for some people.
But these savings vehicles currently pay LESS than 1 percent interest. Many pay next to nothing! To make things worse, the paltry interest you earn is fully taxable!
Fortunately, there is a way that you can earn money faster, on a tax-deferred basis, with a guaranteed fixed rate of interest of as high as 3 percent.
How? With a tax-deferred annuity from a highly rated life insurance carrier.
5 Great Reasons to Buy an Annuity
- Low risk – People like safety and security, but they don’t want to sacrifice all their growth potential. Annuities have been compared to CDs because of the low risk. You could argue that an annuity is a BETTER investment than a CD because in almost all cases, the annuity’s interest rate exceeds the rates available on bank CDs.
- Guaranteed rate of interest – Your annuity may have a higher interest rate than a CD or savings account at your bank!
- Tax deferral – Annuities earn interest on a tax-deferred basis, which means that, unlike CDs, money markets and savings accounts, you don’t pay tax on the interest you earn until you take out the cash!
- Lifetime income – Annuities can be perfect for retirement, as they offer the option to receive monthly income for the rest of your life – even if the amount exceeds your initial premium. That means you’ll never outlive the steady stream of money that’s coming in! No bank account can do that!
- Issued by highly rated life insurance companies – The Annuities we sell are backed by the full faith and credit of some of the largest and most financially stable insurance companies in the country.
3 Types of Annuities
Here’s a look at the three types of annuities which are available through AccuQuote:
If you’re looking for payments that begin right away and continue for the rest of your life or for a specified period of time (sometimes called a Single Premium Immediate Annuity or SPIA) might be right for you. This type of annuity is purchased with a single, lump sum amount. In return for your one-time premium, the insurance company promises to make regular payments to you (or another person you specify) for a chosen length of time or for the rest of your life.
Why consider an immediate annuity? Find out more here on the Immediate Annuity page.
Fixed Deferred Annuity
A fixed deferred annuity (sometimes called a Single Premium Deferred Annuity or SPDA) helps you earn interest safely and allows you to postpone the payment of income taxes on your earnings until you begin taking payments.
Fixed differed annuities may have higher interest rates than competing investments, such as CDs.
Is a fixed deferred annuity right for you? Find out more on our Fixed Annuity page.
An indexed annuity earns interest or provides benefits that are linked to an external reference. The S&P 500 is a commonly used index. The value of any index varies from day to day and is not predictable.
Should you consider an indexed annuity? Find out more on the Indexed Annuity page.
To learn more about this amazing financial product and talk with an experienced professional about which annuity is best for you, call 800-442-9899 or click the Get Started button.