What Your Elderly Loved Ones Can Expect With Retirement Annuities This 2021?

​Retirement annuities can be lucrative investment means to grow wealth. But, you have to be careful when deciding if annuities are for you.

Annuities can be sources of lifetime income. They can also be not so. Sometimes, it may cost more money than the amount returned. Below are the other pros and cons of retirement annuities: 

Pros 
Income for a Lifetime 
There are many instances when annuities pay for an income for a lifetime. But, that is not always the situation for all people. If annuities only provide a temporary income supply, it pays social security income until old age. 

Deferred Distribution Benefits 
Annuities are tax-exempt. Checking deposits and other investments for retirement requires seniors to pay taxes. You only pay for taxes in annuities when you withdraw the funds you have invested. Thus, you get to control the shots on how your money is spent on annuities. 

Annuities can decrease the amount you pay for social security taxes. When you don't withdraw funds right away, your income has fewer taxes. 

Rates are Guaranteed 
Fixed annuities have a guaranteed amount of investment return within a specified timeframe. 

Cons
Fees are hefty 
Annuities are way more expensive than mutual funds and checking deposits. A substantial number of annuities are paid through agents. Thus, you also pay for commission fees these agents get upon getting an annuity. So, it's better to get an annuity from an insurance company directly. 

Insufficient Liquidity is Present 
In most cases, you'll pay a penalty fee for withdrawing annuity funds before maturity. The term of maturity is usually within six to eight years but can sometimes be prolonged. Annuity contracts can also come in large amounts. It isn't easy to void annuity contracts once they're signed. 

Tax Rates are Higher 
If you withdraw funds sooner rather than later, your annuity's tax rates become higher. So, you have to think twice before getting an annuity. Don't get an annuity if you don't need it. 

Conclusion 
Annuities are not for all people. Don't compare yourself with others. Not all people have the exact needs and financial capacity. Don't get an annuity to be like other people you know. 

At the Medicare Supplement Store, we do our best to ensure 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.