Annuities – Are They Worth It?

Is Investing in Annuities a Viable Option?

By Max Oser, Contributing Writer

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You can’t hate annuities because they bring you the money

It’s hard not to love money.  Even when you aren’t concerned about it, you have to depend on money because today’s world of today is all about it.

Money becomes more important once you arrive at retirement age.  This is the time you should no longer worry about how to support your living costs.  For instance, you might have invested in annuities.  These are your lifelines because they may become your biggest financial provider when you are no longer able to work and earn a living.

Investing in annuities is a smart choice.  However, it seems that some people are having a hard time trying to convince themselves about whether to invest in annuity programs.  You may have heard a few grumbles here and there about, for example, how terrible the equity index annuities are.  It’s rather easy to be influenced with such a claim, isn’t it?  However, if you take a closer look, you’ll know that these investment programs are only meant for the betterment of the society.

The reluctance to invest in annuities may be because of fear of the unknown.  Typically, most people are unfamiliar with investment and it has often been associated with unpredictable risks.  However, annuities are different because, regardless of how bad the economy is, your capital investment won’t likely be affected.

In terms of equity index annuity, this retirement plan provides you with a way to earn interests based on another index.  In most scenarios your investment will be based on the S&P index but some other standards are similarly applicable.  This is where the confusion starts.  A lot of people believe that they are buying shares from a company. In reality it has nothing to do with buying stocks or shares.

Can you earn right away from immediate annuity?

Perhaps the idea of investing in equity index annuity still scares you.  Don’t worry though, because your options don’t end here.  There are a variety of annuities available. The immediate annuity is a great option to start with.  It starts paying soon after the contract has been purchased.  The longest waiting period would be a year.  Anyone can invest in this retirement plan.

If you have a lump sum of cash you can hand it over to an insurance company of your pick, a month later you may receive a cheque.  The insurance company pays you on monthly basis until the end of your contract.  You may also choose to invest in a lifetime plan where the insurance company pays you every month for the rest of your life.