Fixed annuities allow you to accumulate tax-deferred funds for retirement and then, if you desire, receive a guaranteed income (this process is called Annuitization) payable for life or for a specified period of time. Annuities are offered by Insurance companies and sold through licensed agents. The insurance company must be evaluated and licensed in your state as does the agent. Annuities are very similar to Certificates of Deposit (CD's) offered by banks. Just like banks insurance companies offer different rates and returns on annuity investments.
Advantages of Annuities:
All annuities have three primary advantages: Tax Deferral, Avoidance of Probate, and a Guaranteed Income (optional) for a fixed period of time, or income for life.
More specific reasons to invest in fixed and immediate annuities:
- You need to safely create wealth for your heirs
- You need tax-deferred growth
- You need your principal and interest guaranteed
- You need your heirs to avoid probate upon your death
- You need an increased death benefit
- You need gains without the downside risk
- You have money that is designated for inheritance
- You do not need more than 10% liquidity annually
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Annuity Companies include but not exclusive to:
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