Annuities that you can get from your insurance company can come either as a fixed annuity or a variable annuity. Whatever you choose you can bet that these annuities share general benefits delivered to you. So why check on what annuities can do? Here’s a rundown of the many good things that can be delivered by annuities.

One good thing about your next annuity is that this will be ideal for estate planning. With the annuity, you get to pass the proceeds of the contract to your beneficiary without the delay and expense. The annuity also has the power of tax deferral. This is because you will not pay taxes on the earnings every year. You only have to pay on the taxes the moment you withdraw the annuity’s gains. This kind of contract doesn’t have contribution limits. Your contributions for other retirement savings like 401(k) accounts and the Individual Retirement Accounts have limits. With annuities you get better flexibility. The amount of contribution that you can get will depend on your capacity. You can also add to your annuity contract at any time.

As mentioned the flexible payment options allows annuities to look good. With the 401(k) or the IRAs, you will be given the chance to withdraw the funds at age 70. But with annuities, you get to select the arrival of your funds and you can select the appropriate methods for your needs. For example you can go for the lump sum distribution payment. The periodic distribution is an option as well where you can take the money when you need it. You can also opt for the systematic distribution of the funds. This can be a fixed or a variable amount that can be sent to you on a regular basis. Simply put, this type of investment offers you flexibility.

This entry was posted on Friday, October 17th, 2008 at 1:46 am and is filed under Income / Retirement, Investing Basics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.