All annuity types have their pros and cons. Flexibility, security and market risk reduction are some of the general advantages of annuities. There are also more complex tax benefits that can be obtained with investing in an annuity as well. The right choice depends on investors and their current needs and portfolios.
Fixed deferred annuities make sense if you:
- Desire the security and safety of a guaranteed interest rate
- Want tax deferral advantages
- Have considerable assets to set aside for at least five years
- Are looking to potentially convert into a future income
- Are saving for retirement
Variable annuities make sense if you:
- Want gains of potential market growth
- Have significant assets to set aside for 10 years or more
- Want tax deferral advantages
- Are looking to potentially convert into a future income
- Are saving for retirement
Income annuities make sense if you:
- Are in retirement or are entering retirement
- Desire a guaranteed retirement income
- Have a rollover or lump sum to convert into an income stream
- Have concerns about outliving your income
To decide what option best fits your unique requirements it is best to consult a licensed agent to analyze your current circumstances, portfolio and financial needs.
