Annuities and your Long Term Future

By Compuquotes Team on April 19th, 2008


Wealth building and estate planning are very popular these days. It wasn't so long ago that people didn't worry about their "golden years" because they stayed with the same company from the beginning to the end of their working careers. Whether military, civil service, manufacturing, railroad or a vast array of other careers, they all had retirement plans that the employees and businesses both contributed to in order to create a safe retirement package. Retirement benefits used to be one of the biggest factors in job selection for young people. Nobody thought much about annuities, as such. The retirement plans were basically annuities, however, and kept retired people in pretty good shape. But that was a long time ago. This is today.

In the changing and shifting job market, retirement plans don't always hold up to the number of employees and the number of years involved in making them pay well. So many huge companies have gone under, leaving their employees high and dry, with nothing to show for their years of service. Other companies have changed their retirement policies as their employees grew close to retirement age. 401K's are a fine thing, but cannot always be transferred from one job to the next (and the next). Some of them are only good if one stays with the same company until retirement!

In this day and age, the wise person will make arrangements for a subsidy to their retirement benefits. Many people prefer the stock market, or investing in real estate (not so many now since the sub-prime debacle, of course) and trust to the financial whims of others for their future security.

Annuities are another matter altogether. A lump sum can be placed into an annuity account for future use, growing all the time. Payments can be made to an annuity account for as long as the payer wants. If one places $100.00 a month into the account for 20 years, they may then remove $100 per month, every month forever! That's the way it works. The bigger your payments, the more you can withdraw when the time comes. If an annuity starts with, say, $50,000 and you let it ride for the same twenty years, you can remove considerably more every month. Basically an annuity is a savings account based upon the derived interest from either the initial deposit or the accrued interest on long term deposits.

An annuity can provide you with a little extra every month, or a lot every month, depending on the size of the account and the amount of the payments. Long term uses for an annuity include paying off a home, enjoying retirement, covering medical expenses that come with advanced age, and even the ability to leave an estate to your loved ones. Not to mention the ability to take vacations and live very well in the "golden years".

Annuities are not meant for short term investments. They are a guaranteed steady income for long term investors who want to secure their future and provide a little extra for their retirement income and lifestyle.

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