Investing in annuities a little at a time(finished)
Investing in Annuities a Little at aTime
When planning for retirement,it’s tough to know exactly howmuch of an annuities nest eggyou’ll need in order to createthe guaranteed income stream to support yourdesired lifestyle once you reach your goldenyears.
The good news is you don’t have to decide. Nowyou can buy an annuity instages as opposed to onelump sum – a little hereand there versus a lot now.In essence, an annuity is acontract with an insurancecompany.
In exchange for making a payment now, you areassured that the insurance company will provideyou with a stream of income in the future. Thatstream of income could last for life. Dependingon the annuity, it could even go to yourbeneficiaries after your death.
Many investors believe an annuitymust be purchased in a lumpsum.
It is true that an annuity can bepurchased in a lump sum, but itcan also be purchased in aseries of installments. Investingin an annuity in this way – alittle at a time – means you don’t have to hand overa huge chunk of cash at once. It also eliminates theneed for investing all your money when interestrates (and thus payout amounts) are low, which maybe the case in today’s market, thanks to thequantitative easing by the U.S. Federal ReserveBoard.
Whether you’re making a lump-sum payment ora series of payments, it’s important to choosethe highest-quality insurance company – onewith high ratings from Standard & Poor’s andA.M. Best Company.
Ask your advisor to help you to make thisimportant decision.