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Annuity Investment - Annuity Investment for Retirement Annuity is a particular insurance product that might guarantee to receive amount of dollars regularly as result of investment until the end of annuity contract. Why should you consider annuity investment for your retirement? Annuity as a particular insurance product offers insurance benefits such as death benefit, including protection of your investment to beneficiary. While annuity as a particular investment offers investment benefits such as income protection for life, relatively higher interest rate than CD or any bank investments, including tax deferred benefit. Insurance companies use your annuity investment to invest in bonds including stock market depends on annuity product you choose. According to its interest rate, annuity might be categorized into fixed annuity including variable annuity. Fixed annuity is a particular annuity that might guarantee a minimum annuity payment regularly absolutely no matter what happens. While fixed annuity most enemy is inflation, there is fixed annuity variant that may protect your investment against inflation. Instead offers a fixed interest rate, equity indexed annuity set earns to a particular equity index such as Standard & Poor’s 500 Composite Stock Price Index (the S&P 500). Variable annuity is the most complex annuity type. Variable annuity only sold by prospectuses, your investment is not guarantee by any party including its value may increase including decrease depends on performance of your investment option. Many financial experts advice not buy annuity until you have maximize all your other retirement saving such as 401(k) plan including IRA. However, there is a particular option to use annuity investment as your IRA investment. The advantage of the option is higher interest rate over other kind of investments such as CD. While consequence is there is absolutely no additional tax deferral benefit, because IRA is already tax deferred. Don’t forget to consider regarding tax, many people need to change to lower tax bracket during their retirement. Well, the decision could vary based on your expectation of retirement lifestyle. As conclusion, choose well-known insurance company over higher interest rate promise. Request a prospectus, read it, understand it features including benefits as well as fees including charges. Annuity is a complex product, you should contact financial advisor to identify which annuity product or annuity type suit for you. The past do not equal the future rule apply in annuity investment as well as in life.
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