How To Weigh Up The Pros And Cons Of Annuities

The pros and cons of annuities need to considered before you make any firm choices regarding whether to invest in them or not.

Annuities represent a great opportunity to safeguard your future and your retirement, but they can also be fraught with danger if you do not carry out your research thoroughly.

The most important positive feature of retirement annuities is that they allow the owner to build up a retirement fund without the paying any income tax. Tax is only payable when money is withdrawn from the annuity plan.

The other major positive feature of annuities is their safety and reliability in an ever changing economic climate. At a time when inflation is eroding the value of traditional savings, and company pensions are becoming ever less reliable, the need is paramount for something which can provide a secure future. Annuities can fit this role, but only if they are chosen carefully. Annuities which are linked to the stock market through mutual funds inevitably carry a higher degree of risk.

Annuities can also be an important protection against unexpected events which can otherwise devastate normal family life. A structured annuity can provide a regular payout in case of serious injury. They can work extremely well in that role, because they are flexible. Although the order for payout has to come from a court, the actual choice as to when payments are made, how much is paid out, and how long the payouts continue is entirely yours. If you know you are going to have other support for some time, you can defer the payments into the future.

When deciding between annuities pros and cons which need to be considered are the safety of the product, and the return on investment. If you are looking to secure your future, you will need as good a guarantee as you can get. Although there are many annuities which carry a penalty with early withdrawal, these are the very ones you need to look at when you need high security. This is because the product vendor will be able to invest the money long term and achieve higher rates.

The major negative point of all annuities is the penalty they impose upon you in the case of early withdrawal. This a penalty you will need to live with if you want the highest return from a secure investment. If you think there might be a need for some of the money before you reach retirement age, consider splitting your investment between a standard annuity and a more flexible arrangement. These flexible arrangements can also give you a better chance of a higher return, because they are often linked to the stock market through mutual funds. It is important to use diversification if you want to combine maximum performance with optimum security. This is your best strategy for dealing with the pros and cons of annuities.






 

Annuities News:

 

Head to Head Analysis: Emergent Capital (IFT) & AMERISAFE (NASDAQ:AMSF) - TrueBlueTribune

Head to Head Analysis: Emergent Capital (IFT) & AMERISAFE (NASDAQ:AMSF)
TrueBlueTribune
The Company provides customized liquidity solutions to owners of illiquid financial assets in two markets, which include life finance and structured settlements. The Company focuses on lending to outright purchases of portfolios, to tertiary trades, as .

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Novation Settlement Solutions Pledges $250000 in Advances to Victims Affected by Hurricane Harvey and Impending . - PR Web (press release)

PR Web (press release)

Novation Settlement Solutions Pledges $250000 in Advances to Victims Affected by Hurricane Harvey and Impending .
PR Web (press release)
Florida-based Novation Settlement Solutions is pledging $250,000 in structured settlement and annuity advances to qualifying applicants affected by either Hurricane Harvey or those in its home state of Florida needing assistance in preparation of .

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Financial Contrast: JG Wentworth (JGW) & SLM Corporation (NASDAQ:SLM) - The Ledger Gazette

Financial Contrast: JG Wentworth (JGW) & SLM Corporation (NASDAQ:SLM)
The Ledger Gazette
The Company conducts its operations through two segments: Structured Settlements and Annuity Purchasing (Structured Settlements), and Home Lending. The Structured Settlements segment provides liquidity to individuals with various financial assets, such .

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Magomed Abdusalamov receives $22M injury settlement from New York State - ESPN

ESPN

Magomed Abdusalamov receives $22M injury settlement from New York State
ESPN
The state is to pay $10 million into structured settlement annuities for Abdusalamov, $10 million into an account overseen by his court-appointed property guardian (to handle financial obligations, including legal fees) and $2 million to his wife for .

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Man convicted of killing Maple Heights store clerk to 'earn bones' for Heartless Felons - cleveland.com

cleveland.com

Man convicted of killing Maple Heights store clerk to 'earn bones' for Heartless Felons
cleveland.com
Howell was awarded an $85,000 structured settlement after his father, Slater Howell Jr., died in 2003, court records show. Tatum wanted him to share the money with her, Howell testified. When he refused, they eventually broke up and she enlisted the .

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