Medicare Supplement Store Blog
Retirement Annuities offer a guaranteed income stream in retirement, as well as a death benefit to beneficiaries if the pensioner dies before they start taking withdrawals. However, it's important to weigh the pros and cons of this type of investment before making a decision.
How to Choose a Retirement Annuity
When it comes to retirement annuities, there are many different options. So, how do you choose the right one for you? Here are a few things to keep in mind:
Defined Benefit vs. Defined Contribution
With a defined benefit plan, your benefits are based on a formula that considers factors like your salary and years of service. With a defined contribution plan, your benefits depend on how much you (and your employer) have contributed, plus any investment earnings.
Immediate Annuity vs. Deferred Annuity
An immediate annuity starts paying out immediately. In contrast, a deferred annuity doesn't start paying out until some point in the future (usually when you retire).
Fixed vs. Variable
A fixed annuity pays a guaranteed interest rate, while a variable annuity's interest rate depends on the performance of the underlying investments.
Single Premium vs. Multiple Premium:
With a single premium annuity, you make one lump-sum payment. You make periodic payments with a multiple premium annuity (usually monthly or annually).
The Pros and Cons of Retirement Annuities
Annuities offer several key advantages:
The Disadvantages of retirement annuities are
Annuities can be a great method to supplement your income and help you have the financial security you need in your golden years if you are retired or close to retiring. There are many different types of annuities available, so it is important to research and figure out which one is right for you.
At Medicare Supplement Store, we do our best in making sure that our clients are well-protected with affordable and comprehensive policies. We make sure to go the extra mile to help you with your needs. To learn more about how we can help you, please contact our agency at (732) 252-8828 or Click Here to request a free quote. Topics and coverage discussed in this article are not guaranteed, consult with your agents to determine what your policy does and does not cover. We are more than happy to help!