A simple annuity definition is that it is an amount of cash that you receive for money invested. The amount that you invest resides with an insurance company. The insurance company is in charge of your money and responsible to see that you get paid the agreed upon amounts.
The derivation of annuity comes from Medieval Latin annuitas, from Latin annuus, (yearly) from annus (year).
Annuity means a specified amount of money that is paid during specific intervals. The amount depends on the type of annuity and amount of funds you make available. Annuities are often a major part of retirement income streams, providing dependable income.
You can receive a set monthly amount for the rest of your life if that is how you wish your annuity to be set up. An annuity can be paid at the beginning of the term: Annuity Due.
Or it can be paid at the end of each term: Ordinary Annuity.
Variety of Options
- Pay out as long as one's spouse is alive...
- Pay out for a fixed amount of years regardless if the investor passes away during the term...
- Fix in high interest rates to give you an advantage when rates are low...
- Guarantee a payment to your heirs...
- Some will not pass to your heirs, but provide you with better payment options while alive...
The above are some typical examples.
Work Out Your Goal
A free approach is to work out your goal...
Do you want to grow a small monthly amount to a large retirement nest egg (deferred annuity)?
Or, are you interested in steady monthly income starting in the very near future (immediate annuity)?
Determine what you want your money to do for you... Get a free annuity quote and get the best options available for you!
Or, get a free consultation from a Certified Financial Planner to go over your plans to help you make the best decision for your needs.
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