70 NEWS JAPAN - There are different types of annuities, but all boil down to essentially the same thing: An insurance contract that offers guaranteed income, often for life, and sometimes a shot at capital appreciation. It is meant to supplement income from a traditional stock and bond portfolio; it is seldom a good idea to invest more than half of your portfolio in an annuity/annuities because an annuity is fundamentally illiquid.
Read - Indexed Universal Life Insurance Policies: The Perfect Option for Professionals and Business Owners
Annuities make the most sense for pre-retirees and retirees who want to minimize worry about bear markets in retirement. Retirees know they will have a specific stream of income no matter how markets perform. Annuities, in short, represent certainty in an uncertain world.
Read - Millennials: Here are 8 ways to create a financial strategy on your terms
Americans own about a quarter trillion dollars worth of annuities. There are hundreds of annuities on the market. They typically offer generous payments in comparison to other investments, such as bonds. Many have materially higher fees, however, and their payments — reflecting today’s ultra-low interest rates — are not as attractive as they once were. Annuities are likely to become more alluring in the future as interest rates rise, which is widely expected.
0 Response to "What are the different types of Annuities?"
Post a Comment