Buy an Annuity and Secure Your Retirement Years

Annuities are becoming very popular as investment options nowadays. They not only keep your money secure but also increase it depending on the annuity quotes. Fixed annuities are similar to Bank CDs but are specifically designed for retirement savings. An initial payment or the premium ($5,000 to $1,000,000) has to be paid which will then go on accumulating an interest at a rate (3% - 10%) for a certain period of time (3 to 15 years). 



Why choose fixed annuities over bank CDs?

The following are some of the reasons that will show why fixed annuities are better than bank CDs:

* Fixed annuities are very low risk than CDs

* They have more liquidity

* They are tax-deferred

* They offer higher yields compared to CDs



What are the available distribution models? 

There are two distribution models: immediate or deferred. They differ in the way the payments are made. While the former starts issuing monthly payments immediately, the latter does not pay out until the specified term is over, much like the retirement savings account. 

Most of them also have a lifetime income option which allows you to convert the accumulated savings into an assured monthly income for the rest of your life. This makes annuities very popular among the retirees.



What are the features of fixed annuities?

Different annuity providers offer different features, but the following are the common features.

* You have to pay once and to have an assured life-time income.

* The annuity rates are fixed 

* There is almost no risk 

* Guaranteed income even after retirement

* The Procedure is extremely simple

* You also get the option of a Life Insurance 

* You can buy as many annuities as you like

* Your loved ones will inherit the money after your death without having to pay any estate/death taxes.



How to get the Best Fixed Annuity?

You should buy a fixed annuity when the interest rates are high. If you can afford a longer term (10+ years), then you will get a much better rate. The best annuity is one that suits your financial position based and not the one with the highest rates. There has to be a perfect balance between a high rate and flexible terms. 

Buying an annuity is an important decision. You can begin your search with the Internet but be sure to discuss all the pros and cons with a financial advisor. 



Are there any Disadvantages?

Until now everything might seem perfect. But, there is nothing like a perfect investment plan. There is no blanket investment plan that suits the need of everyone. Each plan has a fine-print and be sure to read it before you invest in one. Do not get tempted by the features offered by them as the annuity providers will find a way to make you pay for them. 



Authors Bio:

The author, Jonathan James has written several blogs and articles about annuities. Here he writes about fixed annuities and how they are better than Bank CDs.