| Annuities are generally mis-understood and therefore | | | | This long term income aspect makes it possible for |
| tend to be under utilized by many investors. In this | | | | you to plan for a long and enjoyable retirement. |
| article I will list and briefly discuss a few facts about | | | | A variable annuity is another type of retirement |
| them that every investor should know. | | | | investment and will be especially attractive to |
| First of all annuities are investment contracts made | | | | someone currently making a substantial amount of |
| between insurance companies and investors. They | | | | money and is trying, perhaps late in the game, to |
| work very much like IRAs, in that the money grows | | | | save aggressively for retirement. |
| tax deferred, and the annuity owner can't take any | | | | With annuities the investment earnings are tax |
| distributions from the contracts until they're atleast | | | | deferred until they're withdrawn. At that point they |
| 59 1/2 years old. | | | | are treated as taxable income (regardless of whether |
| They should be a vital part of every retirement plan | | | | they came from selling capital at a gain or from |
| or wealth transfer plan because they're so good for | | | | dividends). |
| people who don't need the money being placed into | | | | It should be noted that investments in annuities are |
| these investment vehicles until retirement. This | | | | not a deposit, not insured by the FDIC or any federal |
| characteristic makes them uniquely suited for saving | | | | government agency, not bank guaranteed, and may |
| for retirement and providing a lifetime income in | | | | go down in value. Investment values will fluctuate so |
| retirement. When you hold this type of contract with | | | | that the investor's units, when redeemed, can be |
| an insurance company you are in essence creating | | | | worth more or less than their original cost. |
| your own pension like payout during retirement. | | | | Investments in variable annuities involve risk, including |
| With payment options that provide lifetime income, | | | | possible loss of the principal amount invested. |
| annuities are an excellent way to fund retirement. | | | | All and all annuities can be a terrific retirement vehicle. |