Interesting Tidbits About Annuities You Probably Didn’t Consider

Retirement signals the beginning of what would ideally be one of the most relaxing periods of your life. No more work or career responsibilities, just enjoying the years with your loved ones, trying out new hobbies, and getting the most out of life. However, getting there requires careful planning and securing your assets, so there’s no need to worry about money.

More and more people are choosing annuities in Farmington Hills as their preferred retirement option these days. You might’ve been intrigued by the ideas of annuities but have been hesitant to pull the trigger. With that in mind, here are some facts about annuities you might not have heard.

What You Should Know About Annuities

Annuities in Farmington Hills is a straightforward concept. Essentially, you enter a contract with an insurance company. In exchange for payments during the accumulation phase of your account, you’ll regularly receive scheduled income for the years outlined in said contract. Although you might be familiar with the idea, did you know that….

There are Different Types of Annuities

When it comes to retirement, there is no one-size-fits-all option. We all have different goals and constraints. Luckily, you can select a type of annuity that best first your retirement plan.

Fixed Annuity

These are the simplest type of annuity and offer the least amount of risk. Your contract guarantees a fixed rate over a pre-agreed span after you’ve made your investment. Once your agreement has reached the end of its term, you can transfer your capital into a different contract without changing the number of your monthly payments. Although safer, this option has a lower income ceiling.

Fixed Index Annuity

These annuities in Farmington Hills are partially invested into the market, allowing you to make gains when the stock market does well while protecting your returns during downturns. Many clients prefer this option because it offers upside while still guaranteeing a return.

Variable Annuity

This option is even more tied to the market, which means an even higher earning ceiling than fixed annuities. However, because this option calls for exposing more funds to the changes in the stock market, you can also lose more money long term.

Annuities Have Been Around for Centuries

Although the idea of annuities sounds modern, this retirement option can be traced back all the way to the Romans. In exchange for a lifetime of military service, the Roman Republic would reward veterans with regular payments after retirement. This idea was replicated in mid 17th century Europe. Still, it was not until Presbyterian Ministers in Pennsylvania started using annuities as a retirement option that we formed the modern understanding of annuities.

Want to Learn More About Annuities in Farmington Hills?

At ABB Wealth Strategies, we are proud to play a role in protecting our client’s retirement. We offer you the tools and knowledge to help you make a well-informed decision and secure your finances for years to come. If you want to learn more about how you and your family can benefit from annuities, give us a call and talk to one of our expert fiduciary professionals today!