In the world of investing, some opportunities are often overlooked. When thinking about retirement, a lot of people know about their 401(k) but many never think about annuities. Purchasing an annuity or a structured settlement is a great investment prospect for your portfolio. The US Treasury Department has changed guidelines for investing into annuities that make them more streamlined and attractive to the retirement investor. There are several different types of annuities that can be purchased, some of which produce more than others. It’s important to research about which kind of annuity is right for you.
Those who want to invest their money into a safe, virtually risk-free environment, they are a great candidate for purchasing an annuity or structured settlement. Purchasing an annuity is a safe and effective way to provide a steady stream of income, prepare for retirement, or give peace of mind about your investments. There is no cap on how much you can invest into an annuity which differs from a standard 401(k). This limitless investment can help provide longer than any other kind of investment. There are many different kinds of annuities such as immediate, deferred, variable, fixed, and they can be structured in several different ways. Deciding what is best for your money is a discussion you should have with your financial advisor before proceeding into any investment opportunity. Understanding the benefits and drawbacks of annuities is also important before proceeding into the investment opportunity.
One of the most beneficial selling points of purchasing an annuity is it’s tax deferment benefits. A benefit to investing in annuities and structured settlements is that it is a tax-free investment until you begin to receive payments from it. Most commonly, people choose to structure their annuities to come to them during their retirement years. Annuities can provide great stability and ease of mind knowing that you will be receiving all of your principle back plus interest without having to pay taxes on the money until it is back in your hands.
You can choose to structure the annuity in a variety of forms all of which depend on what works best for you and your financial goals. Payments can be structured to pay out more in the beginning and decrease with time, or start out small and increase with time. They can also be structured to be paid out monthly, quarterly, or annually. One of the many benefits of purchasing an annuity is the guarantee even upon death. Naming a beneficiary will ensure that your investment will go to your spouse of surviving family members so the principle is never lost. However, this is simply an option. You may choose to have the annuity for your life span only, a join life span, or remaining funds to named beneficiaries. Since people are living longer and longer, one doesn’t have to worry about outliving their retirement savings.
The major advantages of annuities over other types of investments are the tax deferment, which allows interest, dividends, and capital gains to grow tax-free until you start to receive payments, risk of losing principle is virtually non-existent, as well as the guarantee and peace of money about where your investment money has been placed. As long as the investor thoroughly researches the company they are purchasing an annuity from and investigate all of the fine print involved, an annuity can be a great investment opportunity for all types of investors.