Enter for a chance to win Christmas cash! All you have to do is answer this question. Why is that? Well, with uncertainty swirling around Social In Security and pension plans starting to dry up, many people are looking for monthly security when it comes to their finances—especially retirement planning. About 6 in 10 American workers are worried they might outlive their retirement savings. That might explain why nearly half of them plan to buy an annuity by the time they retire or already have one.
The ultimate goal of an annuity is to give you a steady stream of income throughout your retirement, which sounds great at first.
But are annuities really the best way to secure a stress-free retirement? First of all, what is an annuity exactly? Often marketed as a financial product, an annuity is basically a contract between you and an insurance company designed to provide an income that is guaranteed for the rest of your life. You make a payment or payments to an insurance company and, in return, they promise to grow that money and send you payments during retirement.
From there, the various types can get complicated. The first thing you need to know is that there are two main types of annuities you can choose from: fixed and variable. Putting an annuity together is a lot like ordering a burrito at Chipotle, just not as tasty.
You can create an annuity based on your preferences and your own personal situation, minus the chips and guac. Here are the different ways you can put an annuity together. Not available for "instant access" like a bank account. While a portion of your money is available each year for a penalty-free withdrawal, an annuity should be used as part of your long-term retirement plan. Do you have questions about the MassMutual sale? Are you a current annuity policyholder?
Agent Login. Report a Death Claim. Customer Reviews. Types of Annuities. Learn more. Turn your money into an immediate stream of income. A solution for businesses that want to transfer their pension risk. Annuity Insights. Variable annuities are considered to be securities. All broker-dealers and investment advisers that sell variable annuities must be registered. Before buying an annuity from a broker or adviser, confirm that they are registered using the free and simple search tool on Investor.
In most cases, the investments offered within a variable annuity are mutual funds. By law, each mutual fund is required to file a prospectus and regular shareholder reports with the SEC. Before you invest, be sure to read these materials. Test your knowledge on common investing terms and strategies and current investing topics. Learn about investing risks in certain companies that provide exposure to China-based businesses. Are you prepared for your financial future?
Use this checklist to get started. Please enter some keywords to search. What are annuities? How to buy and sell annuities Understanding fees Avoiding fraud Additional information Why do people buy annuities? Annuities provide three things: Periodic payments for a specific amount of time.
This may be for the rest of your life, or the life of your spouse or another person. Death benefits. If you die before you start receiving payments, the person you name as your beneficiary receives a specific payment. Tax-deferred growth. You pay no taxes on the income and investment gains from your annuity until you withdraw the money.
There are three basic types of annuities, fixed, variable and indexed. Here is how they work: Fixed annuity. The insurance company promises you a minimum rate of interest and a fixed amount of periodic payments. Fixed annuities are regulated by state insurance commissioners. Please check with your state insurance commission about the risks and benefits of fixed annuities and to confirm that your insurance broker is registered to sell insurance in your state.
Variable annuity. The insurance company allows you to direct your annuity payments to different investment options, usually mutual funds. Your payout will vary depending on how much you put in, the rate of return on your investments, and expenses.
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