Income Annuities: Why You Might View Them As "Pennies From Heaven"


The word "annuity" springs from the same root word as "annual". Annuity itself refers to the annual cash payment you will receive from this investment after you have reached the age of 59 1/2, or the date agreed upon in your annuity contract. There are all kinds of annuities, but the ones that people love the most are the income annuities.

While you initially pay a large sum for an annuity contract, the insurance garnered over the years accumulates to create a very large amount of cash. The large amount of cash is then paid to you in increments from the time you retire until the money runs out or you die, whichever comes first. That said, you might really enjoy these types of annuities. Here is why you may eventually refer to them as "pennies from heaven".

Ten-Plus Years of Interest Ends up Being a Lot

Most investors buy into income annuities about ten years before they retire, but you could start even sooner than that. The interest that accumulates over the years could double your investment, depending on the interest rate and terms of the contract. On top of the interest that accumulates, you also receive cost of living increases.

Cost of Living Increases

You probably thought that cost of living increases only applied to Social Security, but that's not the case. Income annuities throw the extra annual cost of living increases into your annuity, which generates even more income from the compounded interest. The longer you leave your income annuity to sit without cashing out, the more massive the amount you will have when you finally decide to cash it out.

Guaranteed Cash Flow

What other investment guarantees a regular cash flow on which you can live and sustain yourself during retirement? You cannot lose money on these annuities; you just keep getting more, and you keep getting payments after you cash out. It is one constant payday with income annuities; it almost makes Social Security retirement benefits seem like trifling pennies when you have income annuities that not only keep giving you money, but also guarantee that you will keep getting money for the length of the term mentioned in your contract, and give you annual cost of living increases, too.

Get More If You Wait More

Wait, what? Like Social Security, if you wait a few extra years, you get even more money. This is a deferred income annuity, and it is practically the pot o' gold at the end of the rainbow. Imagine getting an extra one to five hundred dollars with each payment to you from your annuity, simply because you waited a few extra months or years. All that is required of you is a little patience. What is that old saying? Something about heaven rewarding those who wait...

For more information on annuity services, contact professionals like Trajan Wealth.


20 March 2018

How to Invest in CDs

My name is Eva, and I have been a personal investment adviser for the past 15 years. I have helped many clients wisely invest their money, and I want to give you some tips I have picked up along the way. Many people discount the use of CDs in investments, and I believe that this is a mistake. Financial professionals agree that CD rates are going to rise, and you can take advantage of that now. This blog will tell you how to find CDs with the best rates, how to build a CD ladder for investment purposes, and why CDs can be better than a savings account.