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Preparing for the Future with Annuities

By Compuquotes Team on August 18th, 2008
Annuity

We never know what the future might hold, so a little wise planning can be a life-saver as we get older. A good rule of thumb when preparing for the future with annuities is to determine where you plan to be in twenty, thirty or even forty years. If you have a good income, but expect it to improve as time goes by, you may want to consider a smaller annuity for now and add a larger one as your ability to afford it increases.

There are some people that are in a job position or career that they like but the pay most likely will not be increasing. If you don't expect to be making twice your current salary in twenty years, you may want to consider getting a slightly larger annuity so that you have the extra income as you get older. It is vitally important to try very hard not to overextend your finances and create the annuity that you can manage as time goes by.

No one knows what the stock market will be doing in the years to come, or how much higher the prices may go. Those are also things you should consider. One thing is certain; prices very rarely go down on a long term basis. When planning annuities, you should consider how much cash you'll need for necessities as time passes. What may seem like a lot of money today may be of very little value twenty or thirty years from now. During the 1950's for example, annuities that paid $100.00 a month was considered a pretty good addition to your income. Today, it wouldn't be much more than gas money.

The best way to arrange annuities for the future is to start with a lump sum and keep adding to it every month. The lump sum can come from a variety of sources like the sale of a home or business, for example. An inheritance or cash prize would be another means of starting off with a little or a lot, depending on the size.
Some people add their employment bonuses or tax refunds to their annuities to increase the accruing interest and raise the intended balance of the account. This is a brilliant and easy to achieve way of increasing annuities. These are figures that aren't exactly counted on as far as earnings go. By setting aside half if you need the money or the entire amount if you can live without it, is a great way to add to the total of your annuity. This helps add to the payments you will eventually receive.

Annuities can be a great way to secure your future income and pave the way for a much more comfortable retirement, as well as allowing you to have a little extra to add to your income as you get older. If you are not in the class with the super rich you can definitely use this type of sound investment for your future. Annuities are perhaps the only investment that is sure to pay and secure your financial position later on in life.

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