If you are looking for a way to diversify your investment portfolio, a retirement annuity is actually a good option so you can make sure that you have an extra source of steady income when you retire. Just remember that the benefits you are going to receive from your annuity will rely on how stable your insurer is, and how suitable your annuity is to your personal situation and retirement goals. You need to know the types of annuity and providers like Puritan Financial Group, but here are more things you must know before purchasing a retirement annuity.
Retirement and Annuities
Annuities were developed to help the elderly to support their retirement financially in terms of how the annuity holder keeps a portion of his money for the annuity or how he receives payments from it. It is advisable that the holder does not withdraw money from the product until it matures, otherwise he or she will have to pay the 10% fine for early withdrawals. The holder can only take money without having to pay the penalty once he or she reaches the age of 59 and a half. In turn, these withdrawals can add to the guaranteed income that the retiree will need for the rest of his or her life.
The Right Time to Buy a Retirement Annuity
Experts recommend that investors purchase retirement annuities when they begin to buckle up and plan seriously for retirement. Deferred annuities should be bought about a decade or so before they expect to retire so that surrender charges will no longer be applicable should they need to withdraw money from these products in retirement. These annuities, which provide deferred income, may be set to accumulate money up to retirement, after which investors can take distributions as soon as they no longer have the benefits of a regular paycheck from being employed. In this case, the investor can avoid the 10% penalty for early withdrawals because he or she is likely to have reached or gone beyond 59 and-a-half years of age.
When people retire, it is common that investors reallocate portions of their investment portfolios to the less risky assets like retirement annuities while veering away from high-risk investments like stocks. During this age, most seniors consider buying either indexed and fixed annuities. If the retiree is relatively younger and looking for a variation of both growth and guaranteed income, indexed annuities would be suitable, while for older retirees who want to enjoy the benefits of a guaranteed income, fixed annuities are more practical (take note that a fixed retirement annuity pays lower than indexed annuities). TO learn more about retirement annuities, contact a provider like Puritan Financial Group.
Retirement and Annuities
Annuities were developed to help the elderly to support their retirement financially in terms of how the annuity holder keeps a portion of his money for the annuity or how he receives payments from it. It is advisable that the holder does not withdraw money from the product until it matures, otherwise he or she will have to pay the 10% fine for early withdrawals. The holder can only take money without having to pay the penalty once he or she reaches the age of 59 and a half. In turn, these withdrawals can add to the guaranteed income that the retiree will need for the rest of his or her life.
The Right Time to Buy a Retirement Annuity
Experts recommend that investors purchase retirement annuities when they begin to buckle up and plan seriously for retirement. Deferred annuities should be bought about a decade or so before they expect to retire so that surrender charges will no longer be applicable should they need to withdraw money from these products in retirement. These annuities, which provide deferred income, may be set to accumulate money up to retirement, after which investors can take distributions as soon as they no longer have the benefits of a regular paycheck from being employed. In this case, the investor can avoid the 10% penalty for early withdrawals because he or she is likely to have reached or gone beyond 59 and-a-half years of age.
When people retire, it is common that investors reallocate portions of their investment portfolios to the less risky assets like retirement annuities while veering away from high-risk investments like stocks. During this age, most seniors consider buying either indexed and fixed annuities. If the retiree is relatively younger and looking for a variation of both growth and guaranteed income, indexed annuities would be suitable, while for older retirees who want to enjoy the benefits of a guaranteed income, fixed annuities are more practical (take note that a fixed retirement annuity pays lower than indexed annuities). TO learn more about retirement annuities, contact a provider like Puritan Financial Group.
About the Author:
Whether you are planning for your retirement, a college savings for your child or simply want to manage your wealth, contact any of our financial experts at Puritan Financial Group and they will be very happy to assist you. Find out more about Puritan Financial Group at http://www.puritanlife.com/products/annuities.
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