Annuities for Senior Planners

Annuities are certain sums of money paid out to a recipient. This money can be paid out either once per year of once per month. Annuity's supply a source of income that can supplement other retirement incomes like pensions. Annuities come in several different types, each offering its own benefits and drawbacks. The information in the following paragraphs will help you in choosing the annuity best suited for your needs.

Fixed Annuity

The most popular annuity is the fixed, which is similar to the Certificate of Deposit. Like the name says, it pays a fixed interest rate, however a higher one than those of a CD you get from the bank. You can also get either immediate or deferred payments. With deferred payments, the annuity accumulates interest, but an immediate payment gives you payments based on your age and how big the annuity is during retirement. Even though fixed annuities do not earn as much as other kinds, fixed annuities offer predictability and convenience.

Fixed Indexed Annuity

This kind of annuity combines the benefits of the fixed annuity with an ability to earn extra interest that can supplement even more your retirement. It also gives you a guarantee and the safety of knowing you will gain not just the principal, but also the interest. What allows this annuity to earn more interest is that it is linked in with the stock market. You also have the option of choosing an index out of the several options it comes with. The fixed indexed annuity uses a passive investment strategy allowing it to increase with the stock market, but not mirror it exactly.

Charitable Gift Annuity

This kind of annuity is the perfect way for you to make sure to have retirement funds, and at the same time, help a cause that is dear to your heart by a form of planned giving. A contract is entered into by the charity and a donor, which allows a donor to have either property or money transferred to the charity. At that point the donor gets a stream of income for life from the charity, and a partial tax deduction. After the donor dies, the charity retains the balance. How much the donor receives as income is based on several things, which include the charity's policies, the age of the donor and the amount or value of the gift.

Variable Annuity

This is not a very popular type of annuity because it is part of a managed portfolio and depends on how the portfolio performs as to the amount of payments. Recipients receive payments at the end of the accumulation stage. There is a guaranteed minimum, but if the investments did well, the payments may be higher. These types of annuities are avoided by investors because they are unpredictable and volatile.

When it comes to planning for the future and making good investments so that your goals will be met, it is highly recommended that you hire a professional financial advisor. Financial advisors will make recommendations that are based on the needs you have told them about, answer any questions you may have, and show you where to invest money so you will see the biggest return on your investment. With the help of a financial advisor, the return you get will outweigh the cost of services. To secure your financial future, get in touch with us today.