Why It Pays To Be an Annuity Buyer

September 27th, 2010 by James

Why It Pays To Be an Annuity BuyerMost of us turn to annuity buyers when it comes to investing in our retirement. This is primarily because annuity, such as structured settlement annuity, a variable annuity or fixed rate annuities, is an investment for a definite period of time. It means that you not only put aside money but also allow it to garner interest.

When it is the right time for liquidation, you can expect a definite income for the rest of your life or a specified time, as per the annuity terms and conditions. It is worthwhile to note here that annuity buyers can make a good amount of tax-free money depending on how much you decide to invest, the percentage rate, and the financial institution. It is important to note here that annuity is different from certificate of deposit (CD) in the sense that annuities can be liquidated without penalty and tax benefits are possible with them as they are meant for retirement purposes. However, terms and conditions differ from one annuity provider to another and you must always read the fine print to stay assured of facts.

Overall, annuities are one of the most rewarding options for senior citizens and I would surely suggest buying them from companies selling annuities as a great retirement plan. If you have been planning to buy annuity, the best age to buy is 55 years when most annuity companies would be knocking your doors. However, it is suggested that you read everything about the annuity plan by asking for an annuity guide from the bank manager. This guide will be more than useful to help you access the ratios and timelines on which the annuity provider is expecting you to act. For example, if you have decided to invest $10,000 for 5 years, you may be offered an interest rate of 3 percent though if you increase the annuity period to 10 years, you may be rewarded with an interest of 10 percent. Remember to discuss all these critical variables with a bank manager when you look out for the best annuity rates.

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