In “Why consider an annuity?,” Scott Lunsford writes in the Chillicothe Gazette that there is no better time than now to purchase an annuity. He says that while some annuities can be complicated, a fear of many people, a fixed annuity is straightforward and offers you a multitude of benefits for your retirement years. Since you insure your house and car with an insurance company, it is a wise decision to insure some of your retirement savings with one as well.
Fixed annuity rates are currently 3.5% and are guaranteed not to go below 2%, something that can’t be matched by many other savings vehicles. You also are typically allowed to withdraw up to 10% of your money each year without a penalty and with death benefits, you can avoid the hassle of probate court after death.
Fixed annuities are similar to bank CDs, with the exception that they are most often bought through an insurance company rather than a bank. Annuities are different in that they are tax-deferred and offer more flexibility than bank CDs and other savings vehicles. They also have guarantees that last over your lifetime and in some cases, your spouse’s lifetime as well. The author believes that everyone should at least consider purchasing an annuity, especially because of the volatile stock market and very low interest rates that we are currently experiencing.
Written by Rachel Summit
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