Annuities and bonds have some similarities, but annuities are a lower risk option and can provide a higher income stream than bonds. Annuities offer a safer place to put your money and you can earn more interest than you can with bonds.
Bonds have interest rates that fluctuate in the opposite direction of the market; this means the bond will go up when the market is down and vice versa. Once a bond matures, you or your beneficiaries will get back the original amount of the bond. Bonds can be risky because the organization you purchased the bond from can fail, or you could lose money depending on the condition of the market. You can also lose money if you need to sell the bond before it reaches maturity. Bonds are also temporary, so they cannot guarantee an income life.
Annuities are sold by insurance companies and have an interest rate that does not have to be tied to the market’s performance. You can choose to have a fixed interest rate or a rate that is based on an index. Indexed annuities often have a minimum interest rate of 0% or 1% so that you cannot lose money, making it a safer place for your money. You can also choose to have a lifelong annuity so you’ll be guaranteed to have an income for life!
If you would like to have a safe place to put your money that is tax-deferred and can guarantee you an income for life, then an annuity is the right choice for you.
Annuities have flexible options. You can choose whether you want to have a fixed interest rate or an interest rate based on an external index, like the S&P 500. You won’t have to worry about losing money with annuities because you’ll have a minimum interest rate that guarantees your money will remain the same or earn interest when the market is down. You can also decide if you want your annuity to have a set term or offer an income for life.
You should be able to enjoy retirement without worrying about where your income will come from. An annuity can be a great retirement income opportunity when social security benefits are not enough to meet your needs.
If you’re interested in an annuity, fill out the form to the right or give us a call today. One of our licensed insurance agents will help you find the right option for you.