Some Of The Nuances to Consider When Choosing The Right Fixed Annuity
If you believe all fixed annuities are exactly alike, think again. Fixed annuities have different options and rates to fit almost everyone's needs. The key to finding the right annuity is getting annuity quotes that to find the one that's best for your situation. An annuity quote helps you eliminate some of the products that don't fit your situation and find those that pay you the most money. In addition to increasing your return, there's even more good news, annuity quotes are free.
Just because you see a great rate, doesn't mean the product is the best one or makes you the most money. You need to look at all the caveats of the annuity and find one that pays, not just the best rate, but also the best rate for the way you use the product. Some people use the annuity in the same manner as a tax-deferred CD. They want the money to simply grow and don't intend to take it out unless there's a sudden emergency.
They use the annuity as a deferred annuity and need a different type of program than the person that takes periodic payments or wants only the growth from the annuity. An annuity quote helps to narrow the playing field to your specific needs.
Deferred annuities offer the option of annuitizing, taking systematic payments from the contract, at any time. However, most people that use the product in this manner normally like the tax-deferred growth and the ability to put in money without constantly having to renew the contract. This type of consumer needs different features than the person that wants immediate annuitization. They need to check for the highest immediate rate, rate guarantee and other features like surrender charges.
The immediate rate is normally a higher rate of interest than the guaranteed rate. The guaranteed rate is the lowest return the company can give you. This makes the product superior to CD's that have no guarantee on renewal, particularly in times of lower interest rates. Look at not only the high immediate rate but also the length of time they pay it and the guaranteed rate of the contract.
Surrender fees schedules are important to check when purchasing a fixed deferred annuity. The surrender fee is a percentage of the lump sum invested based on the number of years you hold the annuity. The length of time varies but some companies always have a surrender fee unless you annuitize, turn the policy into systematic payments.
Just because you're within the period of surrender fees, it doesn't mean that the money is unavailable if you have an emergency. Like a CD, you can remove all your interest without penalties on most contracts. Unlike a CD, however, most companies allow at least a ten percent penalty free withdrawal once a year or at least once in the contracts lifetime. Look for the penalty free withdrawal ability on the annuity quotes. It means you don't have to keep a lot of emergency money in a low interest taxed savings account.
If you're very young, you might not want to consider using a CD as a vehicle for savings. Just like a Roth or Traditional IRA, there's a 10 percent penalty if you remove the funds before you're 59 . Of course, if you plan to retire early and take systematic periodic payments, there's no penalty as long as you take the payments until you're 59 or at least for five years.
For those that want an immediate payment, the best method to find the highest payout is through securing annuity quotes. Just because the product offers the highest rate of return for deferred money, doesn't mean it offers the highest payment. That's a different interest rate. An annuity quote gives you the exact amount of money you'll receive. The difference could be thousands of dollars over the lifetime of payments. - 23211
Just because you see a great rate, doesn't mean the product is the best one or makes you the most money. You need to look at all the caveats of the annuity and find one that pays, not just the best rate, but also the best rate for the way you use the product. Some people use the annuity in the same manner as a tax-deferred CD. They want the money to simply grow and don't intend to take it out unless there's a sudden emergency.
They use the annuity as a deferred annuity and need a different type of program than the person that takes periodic payments or wants only the growth from the annuity. An annuity quote helps to narrow the playing field to your specific needs.
Deferred annuities offer the option of annuitizing, taking systematic payments from the contract, at any time. However, most people that use the product in this manner normally like the tax-deferred growth and the ability to put in money without constantly having to renew the contract. This type of consumer needs different features than the person that wants immediate annuitization. They need to check for the highest immediate rate, rate guarantee and other features like surrender charges.
The immediate rate is normally a higher rate of interest than the guaranteed rate. The guaranteed rate is the lowest return the company can give you. This makes the product superior to CD's that have no guarantee on renewal, particularly in times of lower interest rates. Look at not only the high immediate rate but also the length of time they pay it and the guaranteed rate of the contract.
Surrender fees schedules are important to check when purchasing a fixed deferred annuity. The surrender fee is a percentage of the lump sum invested based on the number of years you hold the annuity. The length of time varies but some companies always have a surrender fee unless you annuitize, turn the policy into systematic payments.
Just because you're within the period of surrender fees, it doesn't mean that the money is unavailable if you have an emergency. Like a CD, you can remove all your interest without penalties on most contracts. Unlike a CD, however, most companies allow at least a ten percent penalty free withdrawal once a year or at least once in the contracts lifetime. Look for the penalty free withdrawal ability on the annuity quotes. It means you don't have to keep a lot of emergency money in a low interest taxed savings account.
If you're very young, you might not want to consider using a CD as a vehicle for savings. Just like a Roth or Traditional IRA, there's a 10 percent penalty if you remove the funds before you're 59 . Of course, if you plan to retire early and take systematic periodic payments, there's no penalty as long as you take the payments until you're 59 or at least for five years.
For those that want an immediate payment, the best method to find the highest payout is through securing annuity quotes. Just because the product offers the highest rate of return for deferred money, doesn't mean it offers the highest payment. That's a different interest rate. An annuity quote gives you the exact amount of money you'll receive. The difference could be thousands of dollars over the lifetime of payments. - 23211
About the Author:
John C. Ryan has authored hundreds of articles, in an attempt to better inform investors of their options for annuity insurance. Annuity insurance is a major decision for most retirees Click on the links to receive more information, and the latest, best annuity quotes
posted by X - Men @ 4:45 AM
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