We’ve talked about annuities a few times on the site but a few people have asked me recently about where to buy annuities. Always looking to keep our readers happy, we found company that provides free annuity quotes so you could get the process started and also provide some background on annuities.
Click Here For a Free Annuity Quote (or read more about annuities below)
If you would like to know more about annuities before you get a free quote, let’s discuss them a little. For those of you who don’t know annuities are an investment contract between you and an insurance company that provides you investment income for life. They are especially attractive to investors these days because fixed annuities provide a guaranteed rate of return and guaranteed monthly income throughout retirement.
So how do annuities work exactly?
When you buy an annuity you begin by making payments to the annuity provider. You can do this either all at once or over a period of time with regular payments, this is known as the pay-in phase. Once you complete your payments the annuity company will begin paying you back monthly with a specified rate of return included.
There are two types of returns with annuities, fixed and variable. Fixed annuities are appropriately named as they have a fixed rate, say 7% on your money that will be paid to you. Variable annuities on the other hand are tied to another investment like stocks, bonds or mutual funds and go up and down depending on their performance. The advantage here is taking advantage of a strong market, but these days fixed rate annuities are certainly more popular.
The major advantage of annuities is that they are tax deferred, meaning that you don’t pay taxes on your investment until you begin receiving payments. Of that payment amount only the return on your investment is taxed (at least at the time of this writing) so your initial investment doesn’t count there. It is also important to note that unlike other investments annuities are taxed at a regular investment rate, as opposed to a capital gains rate.
All in all, annuities are a very attractive investment option for people looking for tax advantages and security. Regular payments for life are a really good thing these days with the downfall of social security looming down the horizon and regular secure income is something very attractive.
To get more information on how to buy an annuity click here.
