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Annuity Insurance: An Introduction to the Fixed Annuity

Annuity insurance is a long-term investment in which the investor makes up front or on-going payments, and in return gets paid interest and their principle at regular intervals for their retirement. Payments to the investor can be for life, or for a set period.

Annuity insurance can provide many benefits including unlimited contributions to a tax-deferred income stream. Annuity payments give retirees structure, and a beneficial way to plan their spending, and ensure money for life.

There are three main types of annuities: fixed, variable, and indexed. Here we will focus on the safest, and most common type; fixed annuities. A fixed annuity ensures a standard rate of interest on your investment for a stipulated period irrespective of fluctuations in the economic status of the marketplace.

A fixed annuity provides investors with security against the on-going fluctuations of the marketplace. Negative gains are taken out of the equation, leading to a positive, steady cashflow at set intervals for retirement. On top of the security, fixed annuity investors receive tax-deferred interest, at a rate that is often higher than other “safe” investments such as CD’s or low-risk bonds.

Fixed annuities can be paid out in one of two ways. An immediate annuity provides payments to the holder as soon as the annuity insurance is purchased. To qualify for this, the investor must be at least 59 and a half, the minimum age to receive payments without penalty. If you are over 60, you can still choose the other option if you wish; a deferred annuity.

A deferred annuity is the only option available for investors below 59.5 years of age. This annuity gathers interest on money invested at the pre-agreed fixed amount for a number of years until the owner is at 59.5 years old. No tax will be paid until withdrawals are made.

Although there are many reasons to consider a fixed annuity as part of your retirement investment portfolio, it does have its own share of drawbacks, and don’t let anyone tell you differently. One issue with annuities is a lack of liquid capital. Money invested into fixed annuities can be withdrawn before the age of 59 and a half, however, not without penalty from the IRS, and possibly an additional penalty from the insurance provider. Always consider your financial position before investing.

There are many benefits to having a fixed annuity as part of your portfolio, but there are downsides as well. Always consult a financial professional before making any long-term financial investment.

John C. Ryan writes content regarding annuity insurance , providing retirees with the information they need to examine their fixed, variable, and index annuity options.

Image from page 315 of “Forfarshire directory for 1887-8” (1887)
annuity
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Identifier: forfarshiredirec18878edin
Title: Forfarshire directory for 1887-8
Year: 1887 (1880s)
Authors:
Subjects:
Publisher: Edinburgh : Charles Lamburn
Contributing Library: National Library of Scotland
Digitizing Sponsor: National Library of Scotland

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Text Appearing Before Image:
, &c, to match. Materials. & gu Coatings for Children, and Newest Patterns. fii *£ CHARGES MODERATE. ifc * & Q TJ E E IT INSURANCE COMPANY,FIRE. LIFE. ANNUITIES. CAPITAL, £2,000,000. Dundee Branch Office-UN ION BANK BUILDINGS. DUNDEE BOARD OF DIRECTORS. Chairman—J OB.N SHARP, Esq., Flaispinner. GEORGE GILROY. Esq. G. A. COX, Esq. Resident Secretaries—■ W. & R. RITCHIE, Accountants and Stockbrokers. Fire and Life Insurances of nearly every description may be effected with this Com. pany on the most favourable terms. In point of security Queen Policies are unsurpassed Subscribed Capital. … … … … £1,800,350 The Capital Paid-up, … … … … 180,035 The Fire Reserve Funds, … … … 382,146 Life Accumulation and Annuity Funds, … … 539,825 LOSSES SETTLED WITH TEOMPTITUDE AND LIBERALITY. The Company has Paid in satisfaction of Claims, £5,737,358.Influential Agents wanted on liberal terms. Directory.] ADVERTISEMENTS. 305 WIUMM WHfflf, Sewing Machine

Text Appearing After Image:
Maker. Importer and Dealer In all Kinds of Machines. Duplicate Farts For every Description keptin Stock. 39 CASTLE STREET, DUNDEE. LASKIES PURE COFFEE 1|S a Blend of the Finest Qualities of Coffee—entirely free fromJ! Chicory or any other ingredeint. It is Roasted and Groundon the most approved principle, and being- packed in Air-tightTins, will retain for a considerable time that delicate aromaonly to be found in Hig-h-class Coffees. May be had from all Grocers in i lb., lb., and 1 lb. Tins. PREPARED ONLY BY WILLIAM LASKIE DUNDEE. 306 ADVERTISEMENTS. [Forfarshire CIRCULAR NOTES AND Remittanoss to j^^JP^^ World. THE NATIONAL BANK OF SCOTLAND LIMITED Issues CIRCULAR NOTES,FOREIGN CREDITS, and DRAFTS, or LETTERS of CREDIT, available for BusinessPurposes, Travellers, Emigrants, Colonists, and Residents in every British Colony andForeign Country throughout the World. NATIONAL BANK OF SCOTLAND, Limited, 71 REFORM STREET, DUNDEE.18 87. $jailor and §Iotbietr, 114 MURIF^^T^E,JDUNDEE. Pa

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