by Janet Hargraves
A retirement annuity is practical to buy because it helps you build a varied investment portfolio while also minimizing the effect of other investments that are more risky. There are instances when you can benefit from this, but you still need to know as much as you can about this life insurance product including how it works and the different types. On top of contacting a company like Puritan Financial Group, here is what you need to know about retirement annuities, which could help you if you have been researching about this topic and considering buying this to add up to your retirement funds.
Buying a Retirement Annuity
How would know if it is the right time to buy an annuity? Ideally, make your lump-sum payment or initial payment towards your annuity about 10 years or more before you plan to retire. When you do this, you will gain a bigger possibility of taking distributions without paying 10% of its value because of the early withdrawal fees (when you get money prior to your turning 60). Investments like these are subject to withdrawal fees. This is because its main purpose is not for the employee, but to add to the profit of the retiree.
Buying an annuity also assumes that you have maximized other tax-advantage investment vehicles that are geared towards retirement such as your 401(k). If you belong to the higher-income bracket, then an annuity can be especially helpful considering its tax-free growth. If you have extra money to set aside and put into retirement savings, then now is the best time to purchase an annuity. Just remember that an annuity is not all advantages. As with everything else, there are drawbacks.
There are some drawbacks to annuities. Although you will be able to get guaranteed income, your annuity investment will be locked in for some time. Taking withdrawals will result in considerably lower gains due to the 10% penalty, and buying an annuity from an unscrupulous agent or broker may require the payment of substantial fees. In addition, your withdrawals will be treated like ordinary income in terms of taxes.
Investing in retirement annuities can be complicated for someone who is not well informed. If you need the most updated information, you can consult independent advisors such as Puritan Financial Group, who can help you choose the best annuity from the most reliable provider. Your investment planner can help you know if a retirement annuity is right for you.
<a href="http://www.bbb.org/centralohio/business-reviews/insurance-life/puritan-financial-group-in-columbus-oh-70050814">Puritan Financial Group</a> is a leading provider of life insurance based in Dallas, TX. Find out more about <a href="http://www.puritanfinancialcommunity.com/improve-your-community/">Puritan Financial Group</a> please continue reading!
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New Unique Article!
Title: Knowing When to Buy a Retirement Annuity
Author: Janet Hargraves
Email: articles@frontiermktg.com
Keywords: Puritan Financial Group
Word Count: 407
Category: Insurance
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