Some of the popular types of annuities include:
(a) Fixed Annuities
Insurance Company will pay you a guaranteed (or fixed) rate of interest, until the annuitant dies, while the account is growing.
(b) Indexed Annuities
Insurance Company agrees to grow your investments by a percentage of a particular index’s growth or by a specified annual interest rate – whichever is greater.
(c) Variable Annuities
Insurance Company allows you to invest in a variety of pooled investments accounts. These are also referred as “mutual funds with an insurance wrapper”.
Annuities are complicated products whose advantages & tax benefits differs greatly from one product to another product. Thus, it is highly recommended that you should consult a qualified professional before choosing annuity for retirement planning.
[Read Also: 10 Wonderful Reasons To Support An Early Retirement]
It is another best retirement investment options for a stronger retirement. Bonds are debt securities in which a person (here retiree) lends money to a bond issuer (such as private or government organization).
It is usually done in exchange for interest payments & future repayment of the bond’s face value or principal amount after a pre-specified maturity date.
Bonds are often considered as risk-free or low risk investment options with predictable income for retirement. It provides better returns as compared to short-term investments. Some bonds are even tax exempted.
You just need to buy a bond as per your retirement planning through over-the-counter (OTC) markets such as securities firms, banks, brokers, & dealers.
However, bonds may expose investors towards certain types of investment risks such as default, prepayment & even interest rate risk.
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