Are You Investing In Variable Annuities?Variable annuities can be immediate or deferred and can be purchased with single-premium payments or flexible payments over a period of time. They are considered as securities that are regulated by the SEC, and the fund managers invest either in stocks, bonds, and money market instruments. Variable annuities are popular as retirement investments because they offer a periodic payment protecting against the risk of having no savings left as you get older. They are tax-deferred investments as long as you do not withdraw money from the annuity; and in the event of death, the beneficiaries receive at least the principal amount of the annuity. Investing tips While investing in variable annuities, you can choose to invest in a number of options allocating certain percentages of your purchase payment to several different options. During the period while you are still paying and have not begun receiving any payout, you can transfer your money from one fund to another by just paying nominal transfer charges to the insurance company. The payout may be offered as a lump sum or in installments over a certain period of time. It could be a fixed period or a lifetime annuity. Some variable annuities may be immediate annuities when investors start receiving payments soon after purchase. Once payouts start, you cannot withdraw money from your account. Nothing comes cheap, so be sure you understand all aspects of variable annuities before choosing to invest in them. Variable annuity is best suited for long-term plans such as for retirement and not suited for short-term investments. Be very sure the insurance company you choose is financially secure and worth investing in. Make sure you understand the details and that you have selected the right investment package.
|