Annuity in finance is terminating stream of fixed payment. The fixed payment classified by period time. The payment depends on their term whether paid weekly, monthly or yearly. The popular products is the fixed annuity that being used as a tool for retirement financial planning. There are fixed annuity features :-
• Single Premium
• Guaranteed Rate
• Very Low Risk.
• Retirement Income.
• Lifetime Income.
• 1-10 Year Term.
• Hassle Free — No micromanagement. Sign the contract, pay the premium, receive paychecks for life.
• Life Insurance.
• Unlimited Contributions.
• Inflation Hedge.
• Tax-Free Gifts.
This is a basic tip to determine the fixed annuity that suitable for you :-
1. You must learn about bank certificate of deposit. It is similar in fixed annuity but have advantage and disadvantage. Compare this especially in rate of return. Fixed annuity more profitable for longer-term returns.
2. You must know about the liquidity of fixed annuity. It has restrictions that you can’t accesing all of your funds early. Withdrawals in early period will give you penalty.
3. Fixed annuity deferred from tax. It means that your earning won’t be tax until you withdraw it. Learn about how cost you get to paid if you withdraw your earning. The best period to withdrawal is withdrawals are best taken when income taxes are lower.
4. Make sure there are guarantee that your earning is safe. Fixed annuities not backed by government, just the full faith and credit of the issuing insurance company. It is important to check the insurance status and credibility before join it. Always choose the higher rated company.
5. Review the fixed annuity rates at the internet. You can compare the best rates of the fixed annuity competitor.
6. Many fixed rate annuities don’t offer a stability great rate the first year. Don’t panicked but get an advice from expert. Make sure you really understand about their companies, rates.
7. Don’t depend too much with agent. You’ll need to have good knowledge about it.
Some of the features do not include in some country / company. Check yourself before make decision. We won’t responsible for any loss or damage. This is just our opinion from source of information.