Annuities Gaining Popularity During Recession

Annuities Gaining Popularity During Recession

by

clyde24clyd

Annuities are gaining popularity with those that are retired or nearing retirement. Why? Simply because the volatility of the market has made people search for alternatives to the stock market for their retirement income. The recession has left many investors afraid to begin investing again when thee is no true sign of recovery. However, recovery or not, people still wish to retire and do so comfortably. Annuities are one way that a retiree can guarantee they receive income without fearing the market.

A fixed annuity rate will provide the retiree just that: a fixed rate So, for example, when a person is ready to retire and their annuity is now worth 100k, they will be able to begin making their withdrawal percentage (generally 5%) based on that 100k. If the market drops the next year and the annuity is now only valued at 60k, the retiree does not have to worry. The fixed annuity will still pay based on the 100k. It is an appealing choice for many. Benefits To An Annuity Guaranteed payments regardless of market performance Death benefits can be purchased Variety of annuities to choose from that allow you to aggressively invest or just build a nest egg Can be purchased in different monetary increments and more than one policy can be held Drawbacks To An Annuity Annuities may carry higher maintenance costs than an investment Annuities are not FDIC insured, they are an insurance policy There are time restrictions on when you can first begin to make withdrawals on the account from time of purchase There are penalties for canceling the account Annuities, as you can see, have both good and bad points. However, annuities have become a strong player in the retirement industry. Recently more employers have begun to offer this option as a retirement benefit instead of or in addition to their typical 401(k) plans. Many have incorporated an annuity right into the 401(k). This new trend shows how valuable an annuity can be to your retirement. The days of company sponsored pensions and life long income are gone. What few companies that remained offering these golden age benefits before this recession are no longer offering it because of the recession. Every person must take their retirement into their own hands. An annuity can be a wonderful way to secure your retirement. An annuity is an insurance product and can only be purchased through an insurance company. You will find different benefits, different styles and different payment methods from each individual company. It is important that you understand how an annuity works before you make the investment. A little research will go a long way when it comes to your retirement.

OnlineAnnuityRates.com is an online annuity guide where you can find annuity rates, annuity companies and the best annuities for your needs.

Article Source:

Annuities Gaining Popularity During Recession