Most folks would like to have a worry-free, financially stable retirement. When looking for a retirement plan, you should make sure that it will assure you a relaxed lifestyle without any financially worries. With all the pension plans and retirement products being sold in the financial market, you will surely be confused when choosing the best one for you that will guarantee the highest benefits. One type of retirement product is annuities. These have been used to prepare an individual financially for the future. But still, not many people have known or even heard about them.
If you are deciding to invest in an annuity, there are actually several types to select from. The return on your investment may vary depending on the type of annuity you have chosen. The two main types of are the fixed annuity and the variable annuity.
Fixed annuities offer the money you have invested stability and a guaranteed rate of return. You will receive a fixed amount of income for a specified amount of time. The interest rate is not in any way affected with the changes that are happening to the financial markets. Fixed annuity rates are usually lower given that they are considered a safer type of investment compared to the other annuities.
Variable annuities, on the other hand, offer you higher rate of returns that will vary depending on the performance of the financial markets. You can invest in a variety of investment choices such as stocks or mutual funds. You are guaranteed a minimum amount that can increase depending on the performance selected investment. You will get higher returns if the market performs well and vice versa.
Although annuities can be quite complex, you are assured to receive sufficient returns. But before you invest in one, it is important for you to know your needs and financial condition. If you need to know more about annuities, an advisor can have annuities explained to you more. In this way, you will be able to know if annuities are the right investment for you.