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Planning for a Bright Future


About Me

Planning for a Bright Future

When I graduated college, I landed a dream job teaching accounting at a university. For five years I enthusiastically taught my students important accounting principles. During this time, I put a significant portion of my paychecks into a retirement fund. Because I’ve always been extremely conservative with my finances, I invested all of my cash into money market funds. Unfortunately, this decision did not yield great results. Now that I’m older and wiser, I’d like to rectify the retirement mistake I made when I was younger. On this blog, I hope you will discover the best types of funds to include in your retirement portfolio. Enjoy!

Understanding The Benefits Of Annuities For Retirement

When it comes to planning your nest egg, there are plenty of options available to help you save your hard-earned money. Annuities are one way you can plan for retirement that is simple to participate in and provides you with a number of important benefits. If you've considered including annuities as part of your retirement plan, here is some information you need to know.

Conservative Investment

Unlike stocks which can be subject to a volatile market, annuities are a more conservative investment choice. You simply choose your annuity type and begin to contribute to the fund. As times goes on, the annuity will grow based on its attached interest rate. This makes annuities a preferred choice for older investors who are looking for a low-risk option with a guaranteed rate of return. Once you retire, you'll receive the final amount of your annuity in guaranteed payments. Stocks can be subject to major losses if the market takes a downturn, which can be risky for people who are getting closer to retirement age. 

Guaranteed Funds

Depending on the type of annuity plan you choose, you'll be able to decide how long you want to receive your guaranteed payments. This timeframe can consist of a lifetime payment plan or a short-term plan such as fifteen or twenty years. The shorter the timeframe, the larger the payments you'll receive. Another perk of annuities is that the money you put in will grow daily. It's also tax deferred which means you won't be subject to paying taxes on your investment until you're ready to withdraw. You can choose to add extra funds to your annuity as you wish in order to help it grow at a faster rate. 

Other Benefits

In the event of your death, you can designate your annuity funds to go towards the beneficiary of your choosing. This can be your spouse, children, other relatives, and even friends depending on your individual situation. The beneficiary will receive your annuity funds in the same way you've chosen to receive them in most cases. If you choose to participate in a variable annuity, you can also include other investments including bonds and money market accounts with your investment. As with any investment plan, it's important that you read the fine print and have a discussion with your financial advisor so you can be sure that this plan will work for your goals and needs.