There are various reasons you should invest in index annuities. Of course, it’s one way how to earn extra money. Many individuals buy indexed annuities from insurance companies through one-time or several premium payments. Then, at an agreed upon later date, the annuity pays a lump sum or a scheduled payment to the annuity holder. As an investor, look into indexed annuities for tax advantaged returns and reduced risks. Here are the reasons you should invest in index annuities.
Diversify Your Portfolio
First, invest in index annuities to diversify your portfolio. Typically, investors rely on stock investments for growth potential opportunities and bonds for financial protection. However, many are turning to index variable annuities for these features. Index annuities diversify your complete financial strategy through performance balance potential. By diversifying with an annuity, you are guaranteed a steady flow of income throughout your retirement. More so, you’re protected against market downturns such as market volatility, inflation, healthcare costs and taxes. Certainly, diversify your portfolio by investing in index annuities.
Secondly, consider investing in index annuities for guaranteed returns. These annuities offer a guaranteed minimum return. Typically, as a result, you are guaranteed to receive at least a certain amount as return when buying an index annuity. If your index constantly performs well, you have a chance to earn an increased return compared to traditional fixed annuities. For example, say the markets loses 2% of it value over the next year but your guaranteed minimum is a rate of 3%. You will still earn a 3% return. Additionally, indexed annuity’s guarantee minimum usually range from 1% to 3% annually. Definitely invest in an indexed annuity for a guaranteed return.
Market Loss Protection
Next, receive market loss protection when investing in index annuities. Index annuities offer various levels of protection through reserves, contracts or a regulator. When connecting with an insurance company, ensure that they set aside a percentage of your money in “reserves” or in extremely safe assets. Or, you can sign a contract that guarantees that your principal stays protected. As long as you don’t withdraw more than the penalty-free limit, you cannot lose any of your principal. Finally, get a regulator involved. With a regulator in your home state, annuities beat bank money. Therefore, search your state insurance department to learn how your state regulator will make sure your carrier meets its obligations. Of course, invest in index annuities to protect yourself against market loss.
Guaranteed Income For Life
Additionally, by investing in index annuities, you are guaranteed income for life. Choose an annuity income rider as a pension in that it will distribute earnings for life. Income riders, or the Guaranteed Lifetime Withdrawal Benefit, pay you a retirement income check until you pass away. In fact, you receive a check even after the annuity has run out of money. This could prevent you from looking for a job online after you retire. Moreover, the annuity continues to earn interest as you earn your payments. Furthermore, you can stop or restart payments as you need. Or, you could consider withdrawal options to take out money from the deferred annuity. Surely, if you want guaranteed income for life, consider investing in indexed annuities.
Finally, consider investing in index annuities for tax-deferred growth. While your money is growing inside the annuity, you don’t have to pay taxes on your earnings. However, if you withdraw money from your account, you will have to pay taxes on your income. Meanwhile, your earnings grow on the finances lost to taxes. As a result, your money increases faster because you get triple compounding interest. This works best for investors in a higher tax bracket while their money grows. Additionally, as the annuity earnings are tax-deferred, they won’t affect your Social Security benefits. Certainly consider investing in index annuities for tax-deferred growth.
There are several reasons you should invest in index annuities. First, invest to diversify your portfolio for market protection, income throughout retirement and potential growth opportunities. Secondly, invest in index annuities to earn a guaranteed rate of 1% to 3% in returns annually. Next, consider investing to protect against market losses through contracts, reserves or state regulators. Additionally, you can earn a guaranteed income for life by choosing annuity income rider options when investing in index annuities. You can wake up and go order coffee off the McDonalds menu instead of going to work. Finally, invest in index annuities for tax-deferred solutions such as not having to pay taxes on earnings, no affects to your Social Security benefits and earning triple compounding interest. Of course, there are several reasons you should invest in index annuities.