Smart investors know that successful investing is less about getting rich now and more about saving for retirement. Although it’s certainly not a bad thing to enjoy your wealth if you’ve made wise choices, you want to keep in mind that investing is a solid method of ensuring you will continue to enjoy a decent standard of living when you’re no longer working.
It’s essential to recall that many Americans are retiring much later than people used to. Too often, this happens because they failed to prepare ahead.
You can guard against the same thing happening to you by making plans now. There are, in fact, many ways to plan for retirement.
You should investigate all your options to determine which are best suited to your needs and goals. If you have the opportunity to, consult with an expert to learn more about the various ways you can (and should) prepare for your future.
One tool you should consider is an annuity. You probably should not decide whether to open an annuity account after reading a single short article on the subject, but you should at least have a basic understanding of what an annuity is and why it might be a useful tool to strengthen your overall retirement plan.
What Makes Annuities Unique?
An annuity serves a specific purpose that many other kinds of retirement savings accounts cannot: It allows you to receive a consistent income even after you’ve retired.
When you withdraw from an IRA or 401(k), no matter how large it’s grown, you may continue to worry about the possibility that your savings will dry up before you pass on. This is a valid concern.
According to research, human lifespans are expanding to considerably longer than they once were. Traditional retirement options may no longer be suitable for healthy individuals who could potentially survive longer than they might have expected to.
An annuity can help address your worries about this issue. When you contribute to an annuity, you do so with the assurance that you will receive recurring payments later on when you begin to withdraw from it.
You can opt to receive payments for a period of time, or you might be able to arrange to receive them for the rest of your life. Some annuities also may not allow you to begin accessing your funds (if you have agreed to this) until you reach what you regard as old age.
If you have reason to expect you’ll live a long time, an annuity can provide the peace of mind that comes from knowing you’ll regularly receive payments. This will reduce the chances that you’ll be unable to support yourself in your old age.
And that’s not the only way an annuity can be distinguished from other types of retirement accounts. Many others place limits on how much you may contribute to them.
That’s not the case with an annuity. You may contribute as much as you wish, which could be ideal if you earn a lot of money currently and desire to set as much of it aside for the future as possible.
Annuities can also offer generous interest rates. In addition, the funds you deposit into an annuity continue to grow without getting taxed. If you’re looking for a tax-efficient retirement savings option, an annuity may be exactly what you want.
Just remember that choosing a retirement account option requires conducting thorough research. You must make careful choices when you decide how to plan for your future.
This is merely an introduction to an option that offers a range of benefits. You should consider looking into annuities in greater detail to determine whether they’re appropriate for someone like yourself.
