How do I Know an Annuity is Right for Me?

There was a time not so long ago when annuities were the investment of choice for those people nearing retirement. Today, this is no longer true. Some variable annuities can now take advantage of the stock market making them more attractive to younger investors. Remembering that annuities offer tax deferred savings is also a big selling point. Annuities are great when:

• Annuities are great options for people who want better interest rates than those offered by CDs or money market accounts.

• Annuities are great because of tax deferment benefits.

• Annuities are great when you need another investment vehicle after you have maxed out your other investments.

• Annuities are great you need to roll over other investments into another account.

• Annuities are great when you need a guaranteed income for life.

• Annuities are great when you want a guaranteed income for yourself and your spouse for life. +

• Annuities are great when you buy an equity-indexed annuity which gives you the security of a fixed payment while offering the growth options of investing in the stock market.

How Much Money do I Need to Purchase my First Annuity?

That depends entirely on you and your future retirement plans. Traditional annuities offer stability and the benefit of tax deferment. Equity-indexed annuities are right for those who want to grow their funds while retaining the same security on the principal as fixed annuities.

Here are a few More reasons to buy an Annuity.

• You can choose to receive a guaranteed income for life. Other investments do not offer this unique and attractive option. No matter how long you live, you are guaranteed to have annuity income as long as you live.

• You can contribute as much money as you desire into your annuity without the restrictions that other investments like IRAs have. Although some companies may have limits, most will allow you to invest much more than an investment like a Roth IRA.

• Some companies pay bonus rates to investors at the end of the first year. Extra money is always helpful.

• Fixed annuities guarantee income without risk of loss. Other investments fluctuate based on the gains or losses of the stock market. Fixed annuities offer a guaranteed rate of return.

• Annuities allow you to withdraw limited amounts of funds each year without penalty.

• You can invest current pensions or other investments into your annuity without paying any taxes or penalties.

• As long as you select a beneficiary, your heirs will receive your income annuity after your death without waiting for probate court.

• Annuities do not charge any annual fees. Called "no load" annuities, these investments offer a great advantage not offered by other types of investments. Since your money does not pay for fees, the principal balance is higher.

• There comes a time when you are required to start withdrawing funds from pensions and IRAs. If you want to avoid paying taxes for a longer time-period, invest those funds in your annuity. You are allowed to contribute as much money as you desire to an annuity, and you can defer taxes until you withdraw payments. Once payments begin, you only pay taxes on the payment at your normal tax rate.