Are you struggling to find the right investment?
You know that your savings are losing value with growing inflation, but you still aren’t sure what type of long-term investment works best to beat continuous inflation.
One of the most overlooked options is annuities. If you pick the right annuity, this can bring you better returns than other traditional investing options. But these get overlooked because few of us know what is an annuity.
Here’s how annuities work:
What Is An Annuity?
An annuity is an agreement between you and an insurance provider. Within this agreement, you make a fixed payment within a set schedule. In return, you’ll receive regular payments from the insurance company.
It’s one of the simplest long-term investment options that you can get into and the rewards are often abundant.
You can also go about selling annuities for a profit at any time. You can click for more details on how this works.
But, how do you choose the right annuity for your needs?
Annuity Types
Now let’s look into some of the most popular types of annuities that you might want to consider.
The first type is fixed. These pay a guaranteed amount and you can determine whether you want them to be paid immediately or at a later date of your choice.
Next, you want to look into indexed annuities. These are often considered the riskiest investment. You have a guaranteed payout but your returns are based on market performance.
There are also often high penalties for canceling your contract earlier than expected. You should only consider this type of annuity if you have experience with fixed amenities first.
Finally, you want to look into variable annuities. With these, you can get a high reward but you also have to be willing to put in a high risk. You can choose to take a low risk or a high risk so you have more flexible options.
Best Practices
Make sure you always consult a professional financial advisor before you choose to invest in any of these annuities. They’ll help you decide which is the best option depending on your experience and risk tolerance.
You want to also speak to your accountant before investing in an annuity. They’ll inform you of your potential tax liabilities. They’ll help you find the best way to keep most of your profits after paying your tax.
You also want to shop around at different insurance brokers before settling on one. Speak to an insurance agent so you can learn about their policies before buying an annuity.
Invest Your Money
Now you know what is an annuity and how annuities work to make you money.
It’s one of the easiest long-term investment options available but you want to ensure you speak to a financial advisor first. You can choose among fixed, indexed, and variable annuities.
These are based on how much you wish to profit as well as how much you want to risk. Make sure you also speak to an accountant to save on taxing and speak to several insurance brokers first.
You can find more investment articles on our website.