Retirement is a portion of life many look forward to reaching. It is a time for peace and relaxation as you live out the rest of your life without having to work. There are many different ways of reaching a successful retirement. One such method is known as an annuity.
An annuity is a contract with an insurance company. You will invest money into the company, and they will pay you back in regular payments. Investments can be made in one lump sum or in monthly payments. The insurance company may use the money, but it varies on the type of annuity. Interest is at a much lower rate than investing in stocks or bonds.
Types of Annuities
There are a few different types of annuities. The two major types are known as fixed and variable annuities. Fixed annuities guarantee a certain amount of interest. It is usually lower than what you would gain from buying stocks. The fixed annuities also guarantees a payout. On the other hand, variable annuities give you options and different risk levels. If the investment goes your way, then you can receive a substantial payout, but you could also lose all the money entirely. Variable annuities give you options, but do not guarantee a payout.
Other types of annuities include indexed, deferred, and immediate annuities. Indexed annuities are tethered to a market index. With that said, if the company does well, then you are looking at a good payout. Deferred annuities start paying you back at a later time. So, you may receive a larger payout if you have been paying for a few years. Finally, immediate annuities are exactly what they sound like. You will start getting paid back within a year.
Is an Annuity Right For You?
There are many pros and cons to each of these annuity types. Texas Insurance Agency can help you find the right annuity for your retirement plan. Our agents work with a dozen different insurance companies, so each of our clients has plenty of options when it comes to insurance. Give us a call today at (281) 398-1010. We can help you find the right life insurance or annuity option for you.