Retirement Planning Should Include Annuities So That You Are Assured of Steady Income
After a lifetime spent in working it makes sense to plan your retirement so that you continue to lead a life that is comfortable and without worries. Once you retire you are no longer able to expect a steady paycheck that comes in every month and need to make sufficient provision through investments to see that you have a source of income that can take care of all your needs.
Annuities are a form of financial investment that can ensure monthly payments for the rest of your life, if you so desire. They require that you make consistent deposits for a certain length of time and this you can easily undertake while you are working and have steady income. So this has to be part of your retirement planning and undertaken well in advance of the planned date.
Annuities explained are a form of low risk investment that provide for consistent financial income and where annuity payments are guaranteed. This is different from investments made in stocks, mutual funds or other forms of bonds which can bring higher returns, which are never certain and can depend a lot on the financial scenario or other factors.
Deferred form of annuities are the most common form of an annuity and will require a certain sum of money to be paid regularly over a period of time. Once that period is over, the investor will receive monthly payments as decided on earlier, either again for a fixed length of time or as long as the investor is alive.
Tax benefits are available for payments made for the creation of annuities and are deferred till the time when the payments start from the annuities. However you cannot withdraw money from them in emergencies without paying high penalties. There is however the comforting thought that annuities bring a constant source of income and allow for a person to be at peace without having to worry about the future as long as the amounts deposited provide an annuity that covers all living expenses.