Why Annuities are a Wise Choice for Your Future

Putting off saving for the future for a later time is not a wise decision. You might argue that the money that you are earning today is meant to provide for your present needs and wants. You can always save more money when you receive a big cash flow sometime down the road, right? Wrong. This is the mistake that most people make. However large the amount of money you receive, it will always be easy for you to find things to spend it on.

Only a scant percentage of the population grow old to live a comfortable life. Most people grow old lacking the resources they need to live a decent life. You have to make a paradigm shift in the way you look at savings if you do not want to spend your old age in destitute. You have to sow the seeds today in order to reap the benefits later on in life when you need it more. Try to have annuities explained to you and you will find that it might be a good instrument to use in order to ensure that you do enjoy what you have worked hard for not only today but for the rest of your life.

There are various types of annuities that you can choose from. Your local financial institutions will be able to offer you a range of options. These options are largely determined by the amount of regular contributions that you can make today, the kind of yield you want to enjoy, and the mode of distribution you wish to have during your retirement years. If you have a large amount of money that you can already allocate for your growing your future retirement fund, you can choose to put in a lump sum payment in a single premium annuity.

Depending on your risk profile, you can choose to go for a variable annuity or a fixed annuity. A fixed annuity would assure you of a rate of accumulation for your funds while a variable annuity will allow your insurance company to shift your funds from time to time to take advantage of investment options that would give your money more yield.

Make sure you get all annuities explained because whatever kind of annuity you choose should match the financial situation you are in and the kind of retirement income you wish to enjoy when you retire.

Advisors Are Selling More Annuities

Here's food for thought...

According to National Underwriter’s “Russell: Many Advisors Want to Pare Client Lists,” financial advisors have an average of 255 clients.

Of those surveyed, 39% said that they have been selling more annuities to their clients.

While most of the advisors already use annuities for their clients, those who don’t seem to have little interest in transitioning to this guaranteed income product. Maybe they will change their minds as clients show more interest in lifetime guaranteed income sources.

Information extracted from a post by AnnuityFYI.

Is an Annuity Right for Me?

In the past, annuities were considered investments only for people nearing retirement. But today, annuities can be smart investments for people of all ages. Remember, an annuity can be invested in a variety of different investment instruments, offering everything from modest to fast capital growth alternatives. The following are good uses for annuities:

1. You need a higher interest-rate alternative to Certificates of Deposit(CDs) and money market funds

2. You want to make your long-term savings grow faster without current taxation.

3. You need to save more for retirement, but you have "maxed out" your IRA and 401(k) or 403(b).

4. You need to roll over (reinvest) existing tax-deferred savings, like pension plans.

5. You need to guarantee yourself an income for the rest of your life.

6. You need to guarantee yourself an income for the rest of your life and your spouse’s life.

7. For purchasers of a special type of annuity called an Equity Index Annuity, You want to protect your "principal" with a guaranteed rate of return while investing in the equity markets.

Annuity Buyers Enjoy Peace of Mind

A new Gallup poll shows that, despite a downturn in the financial markets, a majority of annuity holders feel secure about their retirements. The poll, conducted in partnership with the Committee of Annuity Insurers, revealed that middle-class people rely heavily on annuity products in their retirement planning.

As IRI president Cathy Weatherford explained, “The findings of this poll help to underscore an emerging trend within retirement planning: As more and more Americans begin to take on a renewed responsibility for their retirement security, they are increasingly turning to annuities as the solution to help fund their golden years.”

As Weatherford points out, in generations past, the guaranteed income of Social Security gave retirees confidence that they would receive a certain income. But as the future of Social Security has become more uncertain, the guaranteed income provided by annuity products has become more attractive to those wishing to secure their futures. Buyers of these products enjoy the peace of mind provided by an insured retirement strategy.

BY Senior Market Advisor