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3 Reasons Why You Should Buy Annuities
If you're considering buying annuities then you will want to read this article. Specifically I will give you the benefits as well some of the disadvantages. You should be able to evaluate whether or not to buy after reading this article.
Most people buy annuities because they are a safe way of saving money and they also offer benefits related to retirement. You're guaranteed a periodic payment, as well as, a return on your investment -- not a bad deal at all. In addition, there are certain tax benefits.
When you buy annuities, you have different options on the duration of the annuities, as well as the way you receive payments.
In the past, annuities were traditionally bought and paid for steadily month by month. However, this is not your only option. You can purchase an annuity with one large payment. Also, most people equate their income to be returned to them month by month as well. However, you can also negotiate to get your investment received back in one large chunk as well. For a fee of course.
People who buy annuities are those who want to save money for the future, or those who are currently making large salaries, but aren't sure how consistent the salaries will come in. For example, professional football players may make $1 million a year, but only be able to play professionally for five to 10 years. A lot of professional athletes invest in annuities to ensure that they get monthly payments back over their lifetime, so they don't spend all their money at once and have a monthly stream of income during retirement.
You may consider to buy annuities if you have been awarded a settlement in a lawsuit. If you receive on large settlement and won, you can create a structured settlement agreement, to where you receive annuity payments each month instead of all the money at once. Again, this offers you great tax options and also considers inflation into the equation.
Fixed annuities offer a safer, more reliable return, albeit at a lower rate than a variable annuity. Before investing in a certain type of annuity, you should familiarize yourself with the different aspects involved, as well as the risk.
In conclusion, I have given you three major benefits on why people buy annuities, and who they are best suited for.
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