Planning for Retirement

AnnuitiesPlanning for your life is always good, especially for your later years. Retirement plans give a sense of financial security and a peace of mind. Having financial stability is important as you get closer to retirement. In such a tough economic climate, more people are investing their hard earned money in annuities for greater security.

Annuities are protection for the income you received at retirement. Three parties are involved in the contract: you, the insurance company, and the annuitant. Annuities assist you in saving money for the future. But it is important to remember that annuities are not like saving accounts, life insurance policies, or certificates.

An annuity works in two forms: single premium payments and multiple premium contracts. National Agents Alliance deals primarily with Fixed (Guaranteed ROI) and indexed (S&P) annuities that are single premium payments. In single contracts, the premium is paid at once and the additional funds are not charged to the annuities. On the other hand, in multiple contracts the smaller payments can be made on a monthly or quarterly basis. The multiple is further categorized as flexible and scheduled. With a flexible contract, one can choose the amounts as well as the frequency of payments as long as they fall within certain parameters.

The benefits of annuities are paid, and for this reason annuities are categorized as immediate or deferred annuities. An immediate annuity is one based on a single premium plan and the income starts coming in as soon as the payments are made by you. This is suitable for people who have a large amount of money they want to invest from which they can generate a steady income. The contract in an immediate annuity can be fixed or variable. In fixed a set amount of money is paid every month, while in variable the amounts may vary according to the requirements of the user.

Deferred annuity is one in which the money is accumulated for a longer period of time and can be utilized by the user at the time of retirement. Annuity payments are non-taxable and are only taxed when the payment is taken out.

Be attentive when reading contracts. If there is anything which you do not understand clearly, consult your agent or company representative. The biggest benefit of obtaining an annuity through NAA is enjoying the gains in the market with no market risk for downside. Your account can only go up with value of the account and can never decrease unless funds are withdrawn from the account.

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