Taking the Mystery Out of Annuities
An annuity, as I'm sure you've already read a thousand times is a contract between you and a business. This contract says that if you pay the business they will pay you back... with interest. So, you actually become like a bank and make money from someone else's work. Sounds simple, right? Well, it started out that way.
History of Annuities
Although annuity-like money pools goes back as far as the Romans, the modern annuity was born in the 1700's in Europe. The governments of England and Holland (and others, as I recall) sold annuities instead of what we know as the modern day savings bond. Instead of paying investors back in a single payment, they would pay loans back over time. The annuity was born.
That Was Then... Can You Define Annuities Now?
An annuity today is the same basic thing as it was back in the 1700's. You make a payment or a series of payments to a business or association, they pay you back later in regular installments, usually with guaranteed interest. As you can imagine, not everyone has the same financial means, so changes had to be made to help more people. Now there are dozens of types of annuities available to meet your financial goals. To the left are some of the most popular basic types of annuities.
Setting Your Pay Day: Immediate and Deferred Annuities
The first decision to make about your annuity is about when you want to start getting paid. You can start receiving payments immediately (the Immediate Annuity) or at a later time you specify (the Deferred Annuities).
Scheduling Growth Rate: The Fixed and Variable Annuities
Some people want to save slow and steady at a guaranteed rate of return. This is what we know as the Fixed Annuity. Others are a little more aggressive in their wealth management strategy, taking greater risks because they like higher rewards. These are the Variable Annuities.
Growing With the Economy: The Indexed Annuity
Some people like to grow their savings as if they owned a business, so some variable annuities were designed to grow with the fluctuations of some well-known statistical indicator like the Stock Markets or the Dow Jones Industrial Average. This is the Indexed Annuity.
Combining Types: Making Sense of it All
As you can tell, you can develop several completely different annuities from these types. This is done to be able to meet the wealth management goals of most people. Add into the mix a dozen more specific needs of individuals, and annuities becomes a very complex issue. When considering investing in an annuity, it's always wise to speak with a financial advisor.
Serving Your Needs: Different Types of Annuities
Even with the many types of annuities we've mentioned, some annuities have become very popular tools for retirement savings or for wealth management. It's easy to see why people are afraid to start saving for their future, because they are confused by all the fancy language and terms.
Removing Confusion: Free Annuities Advice
Because many companies charge for annuities and wealth management counseling, people are afraid to get their questions about annuities answered. There are a few companies, like OutlookAnnuities, who really like to help people, even if you aren't their client. Please, get more out of your financial plans by either contacting us online or speaking to one of our annuities advisors at 1-866-866-0242 today.
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