The deferred annuity comes into play if you are searching for a fixed income only after a certain period of time. This allows the income you invest to keep on growing and collecting, only coming to you once you are really in need of it. Remember that the income accumulates and multiplies on a tax-deferred basis, with the annuitant only paying taxes once they begin to withdraw the money. Deferred annuities also offer a death benefit, meaning that if the annuitant dies, the annuity income is paid to their heir, including any investment income that was accrued. This form of annuity is best for those individuals who still have some time remaining before retirement.

For the fixed annuity, you have a financial vehicle that pays you a fixed income monthly from the time that you decide to begin getting money. The rate of return or the money, which is tax deferred, that you receive monthly is pre-determined and will not change. This kind of annuity is best for those individuals who are not big risk takers and like knowing how much money is coming their way each month.

The variable annuity will invest your money in stocks and bonds, and that income is subject to change each month due to market fluctuations. The income grows on a tax deferred basis, and the annuitant can decide to receive the returns immediately or over a long-term basis. The majority of variable annuities also make available a fixed account with a present interest rate declaration as an option for allocating premium or current assets. This product is a good selection for those individuals who are younger and not fearful of the market changes.

Keep in mind that there are several manners in which you can obtain the annuity income.

A lifetime or straight life annuity choice is one whereby you will be paid annuity income for all of your life. This choice allows you to receive a regular income as long as you live, even in the event the money you invested toward the annuity dries up. In some instances, if you pass away prior to the fund money being exhausted, no money will be paid out to either your dependents or heir. The option here of receiving money is a plus for those individuals who need to take care of their own needs and want to be sure of not outliving their assets.

A joint and survivor annuity is where the individual is paid annuity income for as long as they live and even following their death. Meantime, the chosen survivor receives income for a fixed period of years and in some instances, the remainder of their lives. This option is best suited for individuals who have other responsibilities and must care for their dependents.

A refund annuity gives annuitants income for the duration of their life. In the event they die and have not obtained all the payment that is due to them in lieu of the premiums they have paid towards the annuity, their beneficiary or dependent has the chance of receiving the money that the individual did not get in their lifetime. This option is mostly geared towards individuals who are considering retiring from work and those who believe their Social Security benefits will not be suffice to finance their retirement.

Is an Annuity the right fit for you?

Have you considered annuities as part of your financial plan? If not, giving annuities a serious look can be very beneficial for your financial future. Our service provides investors with the ability to locate the most competitive annuities that match their objectives, by filling out a simple form.

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Financial Goals
As any financial expert will tell you, a balanced and diversified investment portfolio is essential to maximizing your risk-adjusted returns. The portfolio should offer appreciation potential with risk protection to insure peace of mind. Annuities can offer both, allowing investors to participate in market appreciation while insulating them from losses. Before determining if an annuity is the appropriate investment vehicle, investors need to account for their investment time horizon, financial goals, and risk tolerance. These factors will determine which type of annuity, structure, and payout option is most appropriate.

Do you know your risk tolerance?
Risk tolerance is a most subjective criteria and which is defined into three broad categories:

The conservative client demonstrates a very small risk tolerance and will place major importance on preservation of principal. They typically will be apt to accept smaller potential gains for a greater level of safety. For these buyers, fixed annuities may compose the bulk of their investments.

The moderate client seeks a degree of safety but is also looking for a portion of the potential rewards that are tied to the equity markets. For this client, the assets allocated for retirement income would be situated in annuities and other available income would be found in more aggressive investments. Equity indexed annuities might be the way to go for the retirement income objective with this individual, depending on the duration of time to retirement.

The aggressive client is that individual who is willing to chance safety for larger growth potential and is more apt to invest in equity funds. Equity indexed annuities might offer safety for retirement funds and still permit participation in the market. It depends on how an investor wants to structure the annuity.

Things to think about when it comes to annuities....
When you are putting together or reviewing your investment portfolio, keep these things in mind on how annuities can be an appropriate fit:

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