Buying the Best Fixed Annuities Explained
Using some of your retirement money to buy fixed immediate annuities can be a good way to help you generate stable lifetime income. Once you have paid for your annuity, you will be receiving income for your entire life, regardless of how long you live. Some of these products come with features such as annual increases to address the effects of inflation, as well as riders that can continue annuity payouts to your spouse after you have passed on. However, the benefits you receive from your annuity are only as good as the insurance company that issues it, making the choice of annuity providers an important one. Here are tips on shopping for a retirement annuity:
Look at company ratings and shop around. There are many solid insurance providers that issue fixed immediate annuities, but at any time, there may be one that offers larger income for the same investment compared to others. Variations in investor income may depend on how they handle your money and how they market these products. Get quotes on one type of annuity from at least half a dozen insurance companies, and make sure that the specifications you give each provider are the same.
Simplify. If the riders your agent sells you are not absolutely necessary (based on your own point of view and that of your independent investment advisor), do away with these add-ons. Insurance agents may want you to buy these riders or add products, such as long-term care or life insurance, which can add to the cost of your annuity and make it hard for you to compare rates from multiple providers accurately.
Diversify. Once you have found viable insurance providers, you may want to think about spreading what you are supposed to spend on one annuity and buy two or three with the initial amount. This is to ensure that you reduce the possibility of investment loss if any of the companies go bust. For example, you can choose to buy a couple of $50,000 annuities and one $100,000 annuity if you were thinking about investing $200,000. While this may result in smaller overall annuity gains compared to buying from one insurance company, you will get more peace of mind.
Buying annuities from stable insurance companies can give your retirement funds a boost in the guaranteed-income department. Make sure that you follow these tips to get the best fixed immediate annuity possible, while finding out more on shopping for these products by talking to an independent advisor and having annuities explained.
About the Author:
Katherine Smith is an author who specializes in financial topics concerning seniors. Puritan Financial Group provides information to retirees who need annuities explained, in addition to investment options that can help them build bigger and stronger nest eggs. For more information on how Puritan Financial Group can help you, please visit them at http://www.puritanlife.com
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