Annuities Are The Answer For Finding A Guaranteed Retirement Plan
Guest Post from Kyle at Amateur Asset Allocator.com
For years the Government has been warning everyone that the Social Security program is in trouble. People are living longer and birthrates are down. This means that there are too many people collecting Social Security and not enough people paying in to it. Enter annuities: a strong alternative. In fact, once you have annuities explained to you, you’ll probably agree they can be powerful retirement tools.
The housing crises and high unemployment have not helped matters either. High unemployment means that there are even less people paying in to social security than had been previously expected. Many people have stopped paying into retirement funds, others have lost a good share of the money they had saved due to the recent troubles on Wall Street.
With even banks going under, many people are scared to invest in anything now. There are options, though. Instead of burying your money in a coffee can in the back yard, consider getting an annuity.
Two of the options involved in getting an annuity involve either a large one time payment or many smaller payments strung out over a period of time. The one time payment is called an immediate annuity and the annuity that is made in payments is called a deferred annuity. The best thing about annuities is that they are guaranteed.
With annuities after a certain amount of time or when the annuity reaches a set sum, you start receiving payments from it. These payments can last your lifetime. These payments are decided as a result of research done to find the average lifespan of the holder of the annuity and the amount of money that has been paid in.
The down side of this arrangement is the fees and taxes. The companies that provide the annuities have to charge larger fees to make a profit. The annuities are tax free until you start receiving your payments. Then the gains that the account has made for you will be taxed.
