May
31
Immediate Annuities: The Real Story
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You might be surprised to find out that buying an annuity after you’ve reached the age of 75 is the best way to maximize your return.
These are some of the Tips and Tricks we share about Immediate Annuities at AnnuityStraightTalk.com
Immediate annuities are what makes this possible. This this program, you pay a certain amount to your insurance provider, and in return, they give you a specified monthly payment for the rest of your life. As interest rates have declined in recent years, annuities have not been as popular; however they still provide a safe and consistent income.
Due to these reduced interest rates, purchasing an immediate fixed annuity after the age of 75 will profit you the most. Your life span will be considered to be shorter in their calculations.
Many factors influence the calculation of annuity payments, and one of these figures is ‘mortality credits’. If you’re in your seventies, you are thought to not live longer than someone who is ten years younger than you. An insurance company will make larger payments to a person who is 70 or older based on the fact that they do not anticipate making these payments for a very long time.
One insurance company’s calculations compared a $100,000 premium payment for a 65 year old man versus a 75 year old man. The 65 year old got $7,740 each year from the company. For the 75 year old it was $10,068 annually. If you really wanted to get the biggest return, a man of 85 years would receive almost $15,000 every year.
If you’re currently healthy and are able to delay your income payments, you may wish to wait to purchase annuities until your are at least 75. However, the obvious detriment is that the benefits of the annuity go away when you do. You’ll need to measure the benefits and risks of waiting this long.
Another aspect to take into consideration is that interest rates will probably begin increasing soon. At the moment, all of the money that the Feds invested in these markets is still present. We could easily experience inflation and higher interest rates when the economy picks up. Thus, you may want to wait for interest rates to increase before purchasing an immediate fixed annuity so you can realize higher returns.
There are definitely Pros and Cons of Immediate Annuities.
If you want the best of both worlds, get an immediate fixed annuity that’s set for 5 to 10 years with the same payment rate. If you pass away while this span of time is still active, your family would still be able to receive the benefits of this kind of annuity. If you outlive the time period, you can re-invest in a new annuity at an older age and may very well take home more per month.
Make sure to do your homework before getting an immediate fixed annuity. Find out which insurance company offers the best terms for a immediate fixed annuity and go with them. Visit AnnuityStraightTalk.com for more useful information.