Annuities Explained Simply

In the United States an annuity is a insured financial product that can be designated as an investment, retirement fund, life insurance, and more. Annuities are sold by carriers, the biggest and most well known being Fidelity. You can also buy annuities through your local licensed financial advisors and they'll take the time to help you learn which annuity is best for you.

Annuities can provide a predictable guaranteed stream of income at fixed intervals from the point you start buying them. They all have different contingencies and levels of volatility but the most common ones have low costs with low returns and low volatility. Think of an annuity as a way to earn more with your savings than a standard savings account interest rate but still take less risk than putting it in the stock market. This puts restrictions on when you can take the money out and makes you commit to a gauranteed return from a long term investment.

Annuities are regulated differently between every state so make sure you're familiar with your states laws surrounding them. Do your homework on all the different kinds, compare them. Consider each ones AM Best Rating, it's like a credit score for the insurance companies selling the annuities. Take into account the tax rates, withdraw fees, and their time contingencies.

There's also your minimum premium which is the least amount of funds you can buy into an annuity with. Some are as high as tens of thousands some are low in the thousands. Generally the more expensive ones have better rates and returns but with the help of a financial advisor you can likely find one that fits your budget and meets your needs.

Business Goals Agency hopes that if you're looking for the right way to hedge costs as you get older, diversify your financial portfolio, or just want to give your family something when you're gone - that you find the right annuity for you with your due diligence.