Understanding Retirement Annuities as a Safe Money Solution

Typically, insurance agents are not supposed to talk about life insurance as an investment. However, life insurance companies sell fixed annuities, and these can be viewed as an investment or savings product. Retirement annuities can provide a safe and guaranteed opportunity to invest money with better payouts or less risk than many other alternatives, and they also give annuity owners a chance to receive income checks for several years or even the rest of their life. If other savings or investment opportunities don’t pay enough interest or seem too risky, you might want to learn more about retirement annuities.

Licensed agents at Trusted Senior Specialists have helped many people plan for a comfortable retirement. If you have already retired or would like to plan for retirement, contact us as soon as possible to learn more about annuities from highly-rated insurance companies. We can be reached at 1-855-474-6234 or at info@ilovetss.com.

retirement-savingsImmediate vs. Deferred Income Annuities?

The right choice between immediate and deferred income annuities depends upon your stage in life. Also, remember that this article discusses fixed annuities, and these are very different than variable annuities that you might purchase from a financial adviser, stockbroker or agent that also has a securities license.

Read these short descriptions, so you can understand the difference between immediate and deferred income annuities:

Immediate annuities: In this case, the annuity owner would write a check for a lump sum of cash to an annuity company. As early as the next month, the owner could begin to receive income checks. Typically, the owner already needs a substantial amount of cash in order to receive large payments over many years. An example would be a large inheritance, settlement, or lottery winning.
Deferred income annuities: These work more like a savings account. Some products can be started with a few hundred or few thousand dollars, and many deferred income annuities allow owners to make periodic contributions over time. These products provide a way for savers to build up the cash to provide them with an income during retirement.

In either case, annuity owners can enjoy regular income checks from their annuities. The amount of each check and length of time that these checks can be received depends upon the amount of money invested, options selected, and the product. Our annuity professionals will be happy to discuss how individual products from highly-rated life insurance companies work.

How Do Retirement Annuities Compare to Other Forms of Saving?

Common ways to save or invest have problems. Banks savings accounts and even bank certificates of deposits (CDs) provide very low returns on money these days. As we have all seen lately, stocks may have higher potential upsides, but they can be risky. Fixed annuities come with higher potential returns than bank products, but they also guarantee the investment and even a minimum return rate.

You might choose an annuity that provides you with one of the two following types of return rates:

• Fixed return rate
• Indexed return rate

Retirement annuities might provide a fixed rate of return, and this can be compared to the interest rate you might earn on your savings account. In this case, the amount is set over the life of the contract and will not change. For example, you might find a good annuity with a return rate of six percent, and you can assume that is how much your money can earn as long as you keep it.

Fixed indexed annuities have their rate of return tied to a market index like the S&P 500. This means that the rate of return increases as the index increases. What if the market declines? Fixed indexed annuities come with a guaranteed minimum return, and this might be about one or two percent. That means that you have a chance to enjoy good returns when the market increases, but you still protect your assets even when the market declines.

Are Annuities the Best Solution for Everybody?

Unlike 401Ks, 501c3s, and IRAs, annuities do not have a cap on how much can be invested. By now, you might wonder how insurance companies can afford to pay high rates of return and guarantee that you will never lose money. Typically, fixed annuities should be regarded as a medium- to long-term solution. Insurers may penalize owners with a substantial surrender fee for drawing their money out before the surrender period ends – usually three-seven years. In return for guaranteeing high payouts, the annuity company enforces a guarantee that you will keep your money in place for a long time.

Learn More About Retirement Annuities

At Trusted Senior Specialists, we have helped countless people find the right life insurance, health insurance, and annuity products to ensure their security. We will be happy to talk with you about the advantages and disadvantages of retirement annuities too. We can be reached at 1-855-474-6234 or at info@ilovetss.com.