What are annuities you ask, well, they are an investment
where you pay into it until you retire. Then once you are retired, you receive
money back from it however there are some differences from other investments where
this holds true. There are many benefits to them but there is also a downside
you should know about., while you are putting money into them, you do not pay
taxes on the money until you start to withdrawal from it.
Annuities
are quit flexible too,
allowing bigger chunk payments or set monthly/annual payments. There are also
generally no limits on them such as with your 401K as well as a guarantee of the
amount that is paid into it, so even if there are market ups or downs, you still
receive a guaranteed amount as set out in the original agreement.
So what is the downside to these amazing sounding investments?
Expensive fees, and often the gains are taxed at a slightly higher rate than
other investments such as mutual funds or your 401k. If they are going to give
you so many benefits, there obviously has to be a downside to them. However
one should look into them if they sound appealing to you. Because as long as you
understand them they can really benefit ones situation. |
