What is Deferred Variable Annuity?
Deferred Variable Annuity manages market risks and generates predictable income for life, and has the added option of guaranteed lifetime withdrawal benefits. Thus, if you are nearing your retirement years and if you want to remain as a investor in the market and want guaranteed income for life, then a variable annuity is the best option for you.
How does Annuities help?
A Variable Annuity is basically the legal contact between a life insurance company and an individual. This contract can either be bought on one lump sum amount or in installments, and in return the insurance company gives you periodic payments based on a portfolio of underlining investments. The sub accounts act as a portfolio and provided with all the information regarding the market. Your investment earnings are not taxed until you start withdrawing and there is no IRS limits on the amount you can invest. Protections are also provided by variable annuity with a GLWB ( Guaranteed Lifetime Withdrawal Benefits) during the two most useful phases of the investment cycle:
•Transition: The years just prior to a shift from saving to withdrawing from your portfolio.
•Distribution: The years during which you withdraw from your portfolio.
In case of a down market, a variable annuity with GLWB can aid you to stay on track. With the security of a guaranteed minimum level of income from a portion of your portfolio, even if markets fall, you’ll enhance the chances of success by being true to your plan of action.
What is Fixed Deferred Annuity?
Fixed deferred annuity provides you with a stable and fixed rate of return and protection of your initial principal. The fixed rate is locked in for a stipulated period of time, for about 3-7 years and limit the access to your investment. They are basically tax differed savings for retirement with a guaranteed rate of return.
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