Choosing Variable Annuities For Your Financial Future
When investing in variable annuities you have a number of choices to make. First you will need to decide between the two main types of variable annuities, then you will also make the decision of where you want the money you invest to go. The two main types of variable annuities are the same as fixed annuities, but because they are variable you have more say in where the money goes and can continue to invest over time.
Deferred Versus Immediate
The two main types of variable annuities, much like fixed annuities, are available in both deferred and immediate types. A deferred annuity is one that does not start paying out until a predetermined date in the future, usually after the term ends. An immediate annuity, on the other hand, starts paying out right away, so that you start receiving monthly checks from the start. The deferred type is generally considered to be the better choice for those who still have some time before retirement. It allows the interest earned to be reinvested and continue to earn. For those who are seeking more immediate returns or who are close to retirement, an immediate variable annuity is the better choice.
Deciding Where Your Money Goes
For many people, the big draw of a variable annuity is the opportunity to determine where your money will go. You can select to invest it in one place or separate it among bonds, stocks, and other options to diversify your investment. Making the choice of where to put your investment requires a little research and knowledge of the current market and upcoming market trends. Fortunately, you do not need to be a financial expert to make these decisions. Your insurance agent can provide you with solid advice and make certain you realize as much return as possible.
You also have the option to move that money around as you see fit in response to economic changes. This allows you to have more say in where you money goes and also works to increase your returns as much as possible.
Choosing your variable annuities is a relatively simple process, but it is more involved than a fixed annuity. Many people enjoy this process, and if this is the case for you, variable annuities are a great choice for your retirement. Your insurance agent is there to walk you through the process and make sure you get what you need from your annuities in order to prepare for your retirement.