Pretty much everyone would like to have more money. Even the richest of the rich would love to find a way to put more money in their pocket. Unfortunately, investing is not always safe. If you’re not careful, you’ll wind up making the wrong choices and you’ll lose your money along the way. The good news is that there are some investments that are far safer than others. Annuities are a good investment that have proven to be very safe over the years. What are they and what are their perks? You’ll find out in the guide below.
What Is An Annuity?
First and foremost, you should better familiarize yourself with the annuity. What is it? Well, an annuity is actually a contract between you and a company. The contract is designed to allow the consumer to meet certain retirement goals. In this type of arrangement, you will make a series of payments or a single, substantial payment to the company. Then, the insurer will begin making regular payments to you at some point in the future. While there are different types of annuities, they’re pretty much the same.
Secondary market annuities usually deliver lower returns, but they’re far safer than the alternatives. Now, you’ll learn more about the benefits of annuities.
Tax Deferral
Taxes can be a real pain in the butt for investors. Bond and stock investors will generally be hit with large taxes just for holding onto their investments. Annuities are more beneficial in this category. In fact, annuities are more beneficial in terms of taxes than individual retirement accounts or IRAs. The money invested into annuities is never taxes until it is withdrawn. At the same time, there is no limit on the specific amount that you can place into the annuity. If you’re looking for a tax-free way to get the most out of your money, you should definitely consider annuities.
More Protection
Another great thing about annuities is the fact that they offer additional protection. Annuity contracts are almost always exempt from creditors. They’re also protected from probate proceedings across the United States. If you wind up getting yourself in financial trouble in the future, there is a pretty good chance that the creditor will not be able to take your annuity. Your investment will continually pay off in the future no matter what goes wrong. And, you can rest assured knowing that your loved ones will be able to get your annuity after your passing. No matter what happens, you can always sell annuity for cash!
Excellent Flexibility
It should also be noted that annuities offer excellent flexibility. With many investments, it is impossible to adjust the risks to better match your threshold. With annuities, it is possible to do just that. There are several types of annuities and the investor can choose the one that they are most comfortable with. You can adjust your package to ensure you get the risk you want and can still meet your financial goals at the end of the day. Also, a lot of annuities will have flexible withdrawal options.
Avoiding Probate Costs
Another great thing about annuities is the fact that they’re immune to probate costs. This makes annuities good for estate planning purposes. If you’re preparing to leave your wealth to your loved ones, you should definitely think about using annuities. With annuities, you’ll never have to worry about a delay. Your loved ones will be able to get the money without any additional costs or any delay in pretty much all states. It may also be possible to pass on annuities without any publicity whatsoever.
An Ensured Payout
If you’re interested in receiving a payout, until the day you die, you will absolutely love annuities. As long as you select the life payout option, you will be able to continue receiving payments until you finally pass away. Even if the value of the contract has been exhausted beforehand, you can still receive payments. This is a great way to generate a reliable income stream for the rest of your life. While annuities are great, there are some risks involved. Be sure that you familiarize yourself with the pros and cons, before getting involved in this type of investment!
