Is There a Final Thought on Annuities?
Annuity income is guaranteed for life, no matter how long you live. It’s pretty comforting to retire with an income that you know will always be there. Also, when death does occur, regardless of the payout plan you choose, the annuity is free from probate because an annuity is an insurance product having a named beneficiary with the proceeds going directly to the designated heirs bypassing court costs, legal fees, and long delays.
In the middle class? Feeling squeezed? It’s a pretty rare investment that offers special tax benefits, but I believe that annuities qualify. With annuities, you’ll find that your assets accumulate more quickly than occurs with some other investments because the interest you earn is not subject to income tax until you begin to withdraw it.
As stated before, you can save in three ways:
1. Your principal earns interest.
2. That interest earns interest.
3. You earn interest on the money you save in current taxes.
In conclusion, always remember this:
Life insurance protects against financial loss as a result of dying too soon. Annuities protect you against financial loss as a result of living too long.
It’s a Wrap
• Annuities are a form of insurance in which the policyholder pays a specified premium and in return receives regular payments for the rest of his or her life.
• The several different types of annuities are classified according to premiums (lump sum or annual), payment return (immediate or deferred), and return on investment (fixed dollar or variable).
• Annuities offer several different repayment options - individual life, joint survivor and guaranteed minimum.
• You must carefully evaluate the credit rating of any insurer that sells annuities. That’s because insurers, unlike banks are not federally insured and, if they default, your funds may be frozen for years.
• Annuities provide certain income tax benefits that are of special advantage to middle-class investors.
• When evaluating annuities, pay attention to four details: minimum initial investments, maximum age for starting to receive payouts, terms for switching among funds and rules for partial withdrawals. These details can be found in each contract’s prospectus.

Thought for the Week
Don’t let your worries get the best of you: remember, Moses started out as a basket case.