Annuities are financial products for individuals seeking secure and guaranteed retirement income.
Annuities usually have penalties on withdrawing money from them, so its recommended people more stable in their careers and finances purchase them. On most annuities, the principal is guaranteed, so you do not have to worry about losing your initial investment. Annuities pay out a cash sum based on the given cash flow schedule associated with that annuity. In the case one needs to withdraw money from the annuity, they are subject to the surrender schedule (a chart based on the percentage penalty one must pay if withdrawing the funds early) and the schedule usually goes about 10 years before the penalty fee is 0.
Most carriers will allow policies as low as $2000 and up to $200,000. If one is looking to invest a larger sum of money than this, they usually would invest in a life insurance policy which I will discuss in my next post! Have a great day everyone!
-Brady
Brady,
ReplyDeleteYour blog is very informative, I enjoyed the break down of annuities and the information on life insurance. The details of how annuities work and the return on investment is important to know but often misunderstood. I used to work in the financial industry as well as real estate so I'm very well versed in investments and life insurance.