All annuities, no matter the type, share the same benefits. If you are interested in adding an annuity to your retirement and estate planning, it is important to learn more about the benefits and how they can pertain to your situation.
- An annuity is passed directly to your beneficiary, without any legal process, expenses, or long delay.
- You do not have to pay annual taxes on your earnings. This is one of the biggest benefits because it helps to ensure that your annuity is growing as fast as possible. Of course, you are required to pay tax when you withdraw the gains. Fortunately, this is something you are able to control.
- Not subject to contribution limits. One of the biggest downsides to retirement vehicles such as an IRA and 401(k) is the limits placed on annual contributions. With an annuity, on the other hand, you can contribute as much as you want up to the amount detailed in your contract.
- A variety of payment options. As you probably know, you have to make withdrawals on your IRAs and 401(k) accounts at or before the age of 70 ½. For many, this is a problem because they are not in need of the money. Did you know that you can withdrawal money from your annuity after 70 ½? Along with this benefit, there are many ways that you can receive your payments including: periodic distributions based on what you need the money; lump sum distribution; fixed distributions; or annuity payments to ensure that you receive money for the rest of your life.
If you are interested in an annuity, contact an insurance company that offers these products. From there, you can get started by filling out an application and making an initial “payment” to your account.