When you’re thinking about sources of income, there are many different options. It’s important that you’re aware of all the different choices so that you can make the decision that works best for your situation.
What are Annuities?
Annuities are a form of investment that you can use as an income source in the future. Annuities are sold through insurance companies. Those companies are the ones that will receive the payments (made by you). They will then return parts of that payment to the individual that owns the annuity after a certain amount of time. This is a great way to have a controlled income in the future, especially for retirement.
Pros of Annuities
If you have a large sum of money and want to invest it, then an annuity could be the right option for you. One of the pros is that you can be sure you’ll get money in the future. Other types of investments don’t guarantee a return, but this type of policy does.
Another pro is that you can choose the length of your annuity. If you want to receive payments over a certain span of years, then the right annuity can make that happen.
If you’re considering purchasing an annuity, then it’s important that you make sure you research and learn about all of the different options available.
Cons of Annuities
One con that comes with having an annuity is the high fees. Annuities have annual maintenance and operational charges that must be paid. There are also surrender charges you must make a note of. If you try to get money out of the annuity before a specific amount of time has passed, you will have to pay a pretty hefty surrender fee.
If you’re under 59 1/2, you will also have to pay a 10% penalty on the amount you take out.
Ready to Learn More?
There are so many different investment options, and it’s important that you learn about them. We’re here if you want to talk more about annuities and if they could be the right choice for you. Feel free to send us your questions to make an appointment to speak with a member of our team.
It would be best if you didn’t wait to make financial decisions for the future. Starting investing early is important, so let’s go over your options.
