When you're preparing for retirement, you may be thinking about how to ensure your financial security without having to count on any government retirement money. One of the best ways to do this is by investing in a lifetime annuity. These are private insurance choices and are often less publicized, so you may not be aware of how they can work for you. Here are a few things you should know before you decide whether to invest or not.
What Exactly Is A Lifetime Annuity?
Lifetime annuities are essentially prepaid insurance policies that pay out a monthly benefit from the time that you retire. When you enroll, you pay a significant premium via cash, CDs, stock options or any other funds you have accessible. Once you make that payment, your funds will be guaranteed throughout retirement. Since it's prepaid from your own funds, you won't have to worry about a medical exam or access to government funds like Social Security.
Why Consider A Lifetime Annuity?
One of the biggest reasons to consider a lifetime annuity for your retirement is the sense of security. By prepaying the annuity, you can be sure that you'll have those funds when you need them. This means you won't have to worry about the government's retirement funds running dry, because your income will be secure. In addition, although these annuities don't allow you to borrow against the balance, once you reach the minimum age determined by your policy, you can actually get an advance on the policy payments if you're facing a serious financial situation.
It is also important to note that your monthly payments are locked in, so if you live long enough to exhaust the premium you paid, you'll still receive your monthly payments. If, on the other hand, you pass away with a balance still on your account, your heirs will receive the balance of the policy.
What Else Should You Think About Before Investing?
The premium investment that comes with these annuities is significant. That means you'll need to have a lot of cash or other investments to get the policy started. When you do make the payment, the insurance company will invest your premium. The profits of that investment will help to fund the payments for those people who live beyond their policy premium amount. Keep in mind that the more you can put into the annuity initially, the more you'll receive when you do retire.
Lifetime annuities are a great alternative to the traditional retirement plans. If you're looking for a way to secure your income without worrying about government retirement payments, talk with a local insurance agent about a lifetime annuity today.