If you are new to the world of annuities, it is very easy to get confused and overwhelmed by the many different choices you have to make. Should you buy an immediate annuity that requires a single premium payment? Is it more appropriate for you buy a fixed annuity with a flexible premium payment schedule? What are the benefits of buying an index annuity? We are here to help you make the best decision for your personal situation. Once you get the basics down, you can make an informed choice.
Benefits of Buying an Annuity
- Guaranteed to have income for as long as you may live with a lifetime income rider
- Major insurance companies, with billions in assets, stand behind the guarantee
- A safe investment with returns that are better than low-paying CDs
- Unlike an IRA or 401K, there is no limit on how much you can invest
- During the accumulation period (deferred annuity), money you invest grows tax-free
Risks to Consider
- Liquidity risk – you may incur surrender charges and penalties for early withdrawal
- Interest rate risk – If interest rates rise, you may be “locked-in” at lower rates
- Purchasing power risk – Inflation may erode your purchasing power
While you should be aware of each of these risks, there are ways to deal with all of them. First, you should not put all of your assets into an annuity. Keep a portion of your investments in readily accessible liquid assets for emergencies. You can use a hybrid annuity to potentially earn higher interest rates and you can add a cost of living rider that helps protect you against inflation and the risk of losing purchasing power.
Getting the Highest Annuity Rates
Current annuity rates can vary widely, depending upon the type of annuity you are buying and the insurance company that issues the annuity. When comparing similar annuities, your age and when your stream of payments start can also factor into the rate you will receive. Although it is quite easy to buy an annuity, finding one that pays the highest annuity rates is more difficult.
Our annuity calculator makes it possible for us to compare different types of annuities and similar annuities sold by different insurance companies. You may see a high rate advertised in the newspaper, but the stated rate may only apply if certain conditions are met. Our team of annuity experts knows what to look for and always looks out for you. Please click on the orange button for your free, no-obligation annuity quote. We are here to help.