If you’re looking to ensure that you have a steady stream of income in retirement, or you’d like to protect yourself against any unpredictable problems with the stock market, an annuity could be the perfect financial product for you.
With an annuity, an investor makes a significant lump-sum payment up front and then receives consistent payouts from this initial capital on a monthly or annual basis over an extended period of time.
This can be very helpful for protecting your retirement savings against overspending or ensuring that you have a backup income source in times of crisis.
But there are a lot of different kinds of annuities out there, and they all have their own unique features and idiosyncrasies. So which one is the right one for you? Read on below to learn all about the best annuities for income and growth and decide which one is perfect for your specific circumstances.
Best Annuities for Growth and Income
The best annuities are all great for providing a secure and steady source of income for you in retirement.
However, they will all differ from one another in terms of how they operate, and they each carry specific benefits that may or may not work for your situation. Let’s take a look at these products and how they differ in greater detail.
Immediate-Income Annuities
With this product, investors will begin receiving income payouts from their initial purchase right away, without any waiting period.
This is a perfect option for clients who are planning for retirement relatively late in the game and don’t have time to wait for their income stream to turn on.
These are also referred to as SPIAs or single-premium immediate annuities.
Deferred-Income Annuities
Unlike with SPIAs, DIAs, or deferred-income annuities, have a waiting period between when the initial lump-sum payment is made and when the income stream turns on. This option is good for individuals who are planning for their retirement early on and have some years to go before they’re ready to stop working.
With DIAs, the longer the client waits to start accessing the income stream, the higher the value of the payments will be. So there is definitely a strong incentive to invest early and defer the income for as long as possible.
Registered Indexed-Linked Annuities
If you’re looking to use an annuity to grow your initial investment, then you should definitely consider a RILA. These products are linked to the stock market, and their value can fluctuate with market activity.
However, this does not leave clients completely vulnerable, as your policy will protect you against losses beyond a predetermined amount.
On the flip side, there is also a limit to how much you can earn in periods of growth. Even with this caveat, this product is great for maintaining a secure income with a low-risk possibility for moderate growth.
Additional Riders
Even the best annuities can be improved upon with optional add-ons. These are called “riders,” and they are a great way to add additional benefits to an already solid annuity policy.
There are a plethora of different riders available to clients, depending on what policies they have. Here we’ll examine the two most popular and most beneficial options.
Fixed-Indexed Annuity Income Guarantees
This rider allows clients to receive consistent payouts on a monthly basis for the duration of their lifetimes, with greater accessibility of assets than standard policies. It is tied to the stock market for ideal growth potential.
Variable-Annuity Income Guarantees
This rider is fairly self-explanatory, offering a source of guaranteed monthly income for life as an addition to a variable annuity policy.
Find the Perfect Annuity for Your Situation Today!
Now that you’ve seen what the best annuities available on the market today are and you understand how they differ from one another, it’s time to make your decision. If you’re unsure which one would offer you the most benefits, it would be best to consult with a financial advisor in advance.
But once you’ve found the right product for you, you’ll be on your way to achieving a secure income source for your future in no time.