For almost forty years now, 401(k) plans, individual
retirement plans, and other types of qualified retirement plans and accounts
have been the most common way for people to save for retirement. It used to be
that the pension was the popular way to put away money for retirement, but,
ultimately, pensions had so many faults that most people now steer clear of
them
Some of the issues that people had with pensions were things
like losing money if a place of employment was left before reaching a certain
number of years, having great difficulty or being unable to access pension
funds before retirement, and being unable to control the asset base.
Fortunately, though, 401(k)s and most other retirement plans
don’t have these types of issues. Now, people who hold such plans can withdraw
or roll over the funds in their accounts if they change employers. They can
also control the asset base and get a “loan” from their own accounts if needed.
None of this is to say, of course, that 401(k)s or any other
plans are perfect. No, they still have some issues as well, such as having to
guarantee income and being reliant on the market. This is why many people are
moving into purchasing annuities in today’s world.
Annuities, which can be purchased through insurance
providers, guarantee some type of payout over a period of time. There are
immediate annuities, which immediately start growing money from the moment the
annuity is purchased, as well as deferred annuities, which grow even before you
activate annuitization, and guarantee a monthly payout.
You are able to decide whether you want an immediate or
deferred annuity as well as whether you want a fixed annuity, a variable
annuity, or a fixed indexed annuity. Special “riders” or guarantees can also be
added to annuities to make them more beneficial to you.
If you think that annuities sound like they could be a good
match for your needs, then talk with your accountant or financial adviser to
determine which one is the best fit for you!
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