What Are Annuities And Why Is It Necessary?

  1. 12689 POINTS
    Ted Ratliff
    Owner, SFS Associates,
    Annuities are a good safe way to save money for retirement.  They have a very competitive interest rate, some even tied to stock indexes, they avoid probate, are tax deferred, they can guarantee an income for life, and can be set up to help provide long term care.  While the upside would be less than a money market or stock, you do not have to worry about the downside of the market.  While I would never suggest you put all your money in an annuity, it provides a good safe base for the rest of your portfolio.
    Answered on May 29, 2013
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  2. 37376 POINTS
    David G. Pipes, CLU®, RICP®
    Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
    An annuity is a contract that states, simply, that in exchange for a sum of money, the company will pay regular monthly payments for as long as you live.  Since those provisions don’t meet everyone’s requirements there are a variety of other optional payment plans to limit the payout period or provide payments to more than one survivor.  There are two major types of annuities, immediate, where the benefits commence within one year and deferred which allows for multiple deposits over a period of time.
    Answered on August 4, 2014
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