Live In Comfort When You Make Smart Investments During Your Time in the Work Force


Cash for structured settlement payments

Investing in annuities can be a great idea for maximizing your retirement fund. They’re a smart and relatively easy investment to make, both when you’re working and whenever you choose to retire. The purpose of an annuity is to both save money for you during your time in the work force and give you a reliable stream of income once you retire. In fact, you can even roll your 401(k) or IRA into an annuity, taking the money you’ve already saved over the course of your working life and turning it into a relatively stable revenue source. There a couple different types of annuities and each has a different goal and benefits. Overall, remember that the purpose of annuity is to make you money and you want to invest wisely — speaking with a financial advisor may be a good idea before making an ultimate decision.
What Exactly Is an Annuity?
You might have heard the term bandied about when discussing lottery payouts or lawsuit settlement money, but it doesn’t always come from major events like a lottery win or lawsuit. An annuity is essentially an arrangement where one group pays another group a series of payments fixed at a set value for a certain amount of time or until an event (like the person’s death) occurs, or another mutually arranged event. Financial institutions are usually the party to contract with the individual looking to set up an annuity. The purpose of an annuity is to increase and grow funds that the individual contributes — think of it sort of as a personalized Social Security revenue stream, except that your money is only going to you. They were actually set up by life insurance companies as a means of protection and to ensure that people didn’t outlive their income. Today, annuity can help pay for disability or long-term care, among other things. In a financial pinch, many people may consider selling fixed annuities or getting cash for an annuity, although this isn’t necessarily advised. If you’re looking for different ways to invest your money, an annuity can be the way to go!
What Kind of Annuities Are Available?
The two main categories are tax-deferred annuities and income stream annuities, and each can be further broken down into a couple different kinds. The purpose of an annuity that’s tax-deferred is to build your money when you’re still working, while an income annuity gives you the revenue stream once you’re retired. Some people choose to do a tax-deferred annuity if they’ve already made the highest contribution allowed to their 401(k) or IRA. Many different financial institutions offer them with no contribution limits and there’s no tax on income you make within the annuity. Once you retire, that tax-deferred annuity can be turned into an income annuity and taxed at regular rates. However, if you draw these funds before you’re 59 and a half, the IRS will penalize you ten percent.
You can choose either a deferred variable or fixed annuity. The purpose of an annuity that is variable is to offer a higher long-term return, although they can fluctuate with the market and be less stable than a fixed annuity. If you’re more conservative with your money, a fixed annuity may be the way to go, because you’re guaranteed a certain amount of money.
Income annuities can be set for only a certain number of years or stretched to pay out until your death, to avoid a superannuity. The amount of money you would get per month is dependent on how old you were when you purchased it, what the economy looks like, and what kind of annuity you choose to purchase. If you have a spouse, you can also provide for him or her, by listing them as a joint and last survivor, so that the annuity payments come in as long as one or both of you is alive.
Investing in annuities, whether they’re tax-deferred or income-based can be great investments in your future. Consider all your options and invest wisely for maximum comfort in your future, for both you and your partner.

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