.png)
The annuity can be an important instrument in planning for retirement. In its simplest form, an annuity can be described as follows: an individual pays an insurance company a specific capital sum in exchange for a promise that the insurer will make a series of periodic payments to the individual (called “annuitant”) for as long as he or she lives. The periodic income collected under an annuity contract is comprised of three parts: principal; interest; and a survivorship benefit, which arises from the fact those who die release their investment to be spread among survivors.
A basic purpose of an annuity is to assure a person an income he or she cannot outlive, as well as one that is relatively large when compared with the amount paid for the annuity. The periodic income under the annuity should be relatively large because the annuity principle involves the gradual consumption of the purchase price of the annuity. The individual, in deciding what route to take, should evaluate payments under an annuity as compared with the rate of return from relatively safe certificates of deposit or high-grade municipal, corporate, or government bonds.
Since the stock market crash of 2008, deferred annuities have also been widely used as investment vehicles because of the relatively high rates of return being paid, their cash values, and the tax deferred accumulation of those cash values guaranteed in a contract. This why an individual should consider an annuity as a viable option as part of the their complete financial and retirement portfolio. Contact us here at Insured Portfolios so we may customize an individual annuity contract to meet your particular financial goals. If you are about to retire, schedule an appointment with one of our agents local here in Albuquerque, NM, call 505-750-4363.
