Annuities 101
ANNUITIES 101

Are Annuities A Good Investment?
Many people are confused about annuities. In fact, according to a recent Retirement survey, only 25% of consumers scored a passing grade (70%) on an annuity knowledge questionnaire.
With all of this confusion surrounding annuities, it can be hard to determine if they are a good investment and deserve a place in your retirement account. Natural State Advisors truly are the experts in makeing the entire process very simple.
An annuity contract provides long-term guaranteed retirement income. Its main goal is to help you address the risk of outliving your savings.
Most people don't understand this key feature: They can provide you with the funds to retire comfortably. Because of the guaranteed income feature, these products can be an integral part of your retirement planning. So, what do you need to know about annuities to decide if these personal financial products are a good investment for your retirement?
And how do they compare to other investment options, like the stock market, bonds, CDs, and mutual funds? We’ve got your answers.
I will cover with you quickly what annuities are, their pros and cons. Once you have a solid understanding of what annuities are—and what they are not—you’ll understand that they (an annuity) deserve a place in your retirement planning journey if safety is your main concern.
Annuities are personal finance products issued by insurance companies. You provide the funds to the insurer now (either in a lump sum or through monthly payments), the money gains interest, and you receive payouts as dictated by your contract.
Unlike 401k's or non-annuity IRAs, annuities can give you a fixed stream of income that can last the rest of your life.
This is why annuities can be a good choice for retirement.
Annuities offer a unique way to grow your retirement savings and provide retirement income.
They are becoming more and more popular because of this fact.
But as you evaluate whether or not an annuity is a good investment option for you, you must also be aware of its disadvantages.
The Pros of an Annuity
- Multiple interest rate options depending on your risk tolerance (fixed, fixed indexed, and variable annuities)
- Generally, less volatile than stocks
- Available to help retirees accumulate money or distribute money in retirement
- Some companies, like Natural State Advisors offer a simple annuity product with an easy, online application process.
- They allow you to conduct the entire transaction online without going through an insurance agent
- Can provide guaranteed income for life
· Deferred Annuities vs Immediate Annuities
· For those who do not currently need income, there are deferred annuities. A deferred anuity contract just means that you are biding your time taking advantage of competitive interest rates, and letting your money grow TAX FREE- until you need payouts.
· This is known as the accumulation phase. When it's time to receive your payouts (usually in retirement), it's known as the annuitization phase.
· For those who need a guaranteed source of retirement income right now, there are immediate annuities.
There are zero broker fees, no upfront cost, if you deposit a dollar you have a dollar in your account, and zero fees or broker fees ever!
.