Here are the basics of investment. In order to profit when investing, you must balance the risk of big losses over the chance of the highest possible returns. It?s sort of like gambling, in a sense. You can?t win big if you aren?t willing to risk big, but if you risk too much, you may end up with nothing at all. However, this balance between wins and losses was eventually thrown into a loop in the last few years thanks to the wild ?mood swings? of the financial markets and the adverse impact of the economic slowdown. This has made investors shaken and a lot more cautious. As a result of their wariness, these guarded investors are now investing part of their retirement assets in variable annuities.
?Is Investing in Annuities a Sure Thing?
The reason for this increase in annuity investment by investors? particularly retirees? is because an annuity enables people to hand a lump sum to the insurer in order to receive a guarantee of periodic payments that will last as long as they?re alive.? Annuities of the variable variety are tax-advantaged, which means your investment will have less tax deductions when compared to ?traditional? investments. It?s a way to invest in bond, stocks, or others funds without getting ?punished? too much with taxation. What?s more, by paying an extra fee, you will also receive the guarantees of a lifelong minimum income paid out to you even after your underlying funds have already been spent.
However, many critics of a variable annuity allege they are too expensive and not worthwhile. They have too many high fees which will eat away at the funds of annuity investors (otherwise known as annuitants). Besides which, there exists more favorable investment options that could provide investors with relatively the same favorable tax treatments without the exorbitant costs found in variable annuity investments. On that note, investment experts that are pro-annuity allege that annuities are worth the costs because they are a lot more secure when compared to other investment schemes that are susceptible to the whims and conditions of the worldwide economy.
The Case for Variable Annuity Investments
Annuity proponents further claim that no other investment can protect its investors (while also providing them the opportunity to earn a lot more than nominal investment returns) quite as well as the annuity scheme. This is the reason why annuities are highly prized and highly expensive, they say; the expensiveness is offset by the myriad of possible profits and benefits. Many financial consultants out there can vouch for how good an investment the variable annuities are.? Then again, people jumping on variable annuity bandwagon should keep in mind that there are times and certain circumstances when variable annuities aren?t that great of an investment at all.
Because of the fear factor in financial markets at this point, it?s understandable why investors view variable annuities as the safer bet. To be more specific, today is the best time to purchase annuities because they?re uniquely equipped to address the uncertainty of financial markets at present with terms that will keep many an investor?s heart at ease. This is the kind of market wherein annuities can flourish. The market gyrations and the plunging of share prices since the turn of the millennium has practically driven investors into investing part of their assets into annuities despite their cost.
Many investors invest in variable annuities because they don?t want to end up as retirees who ration out their dwindling savings at a time when they?re already too old to hold a job. In addition, annuities offer a package of attractive features and benefits that are unique to it; these attributes cannot be found (in combination) in any other investment plan. For example, there?s a guarantee of lifetime minimum withdrawals attached to this payment arrangement. Regardless of what happens to financial markets and their unpredictable trends, investors are guaranteed by contract to receive compensation annually as long as they live.
Investors also have the power to choose an assortment of death benefits in order to safeguard their investment?s values for their heirs and next of kin. Of course, annuity detractors are quick to point out that these benefits come at a cost. Proponents say nothing is free and the higher fees are worth it. To be more specific, annuities serve as the calming balm to all the fears investors have about losing all their hard-earned money because of the unfavorable economy.
Related posts:
Category: Investment
Source: http://www.financecategory.com/variable-annuity-investing.html
divine mercy cabin in the woods the legend of korra three stooges the three stooges the bee gees woodward
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.