The best way to grow your money is to invest it. Over the years, you’ve likely invested some of your money in various types of investments, including savings accounts, bonds, stocks, mutual funds, and annuities. Investing your money has helped you build a nest egg for the future. Today, you have a unique opportunity to invest in a new type of investment: growth annuities.
What Is a Growth Annuity?
Growth annuities are investments that are designed to grow your money over time. Unlike regular annuities, which guarantee a fixed amount of money each month for a set number of years, a growth annuity allows you to choose how much income you want to receive and how long you want to receive it.
This scheme offers greater flexibility than what comes with regular annuities. And the best part? Unlike regular annuities, which only offer fixed payments, you can choose whether you want your payments to rise with inflation or fall as a percentage of your investment. Growth annuities give you more control over your future.
What Are the Two Types of Growing Annuities?
Ordinary Growing Annuities
With an ordinary growing annuity, your investment grows, so do the payments you receive. Your payments are guaranteed to increase every year if you make regular investments. However, the payments received are only guaranteed for a specified period. Additionally, payments are made at the end of the period.
Growing Annuities Due
With a growing annuity due, your payments will rise over time, but you can choose whether they are guaranteed for a fixed period or grow at a fixed or variable rate. Your payments are guaranteed for the life of your contract or until you die or decide to end the contract early.
The growing annuity contract is more flexible than a fixed annuity. You can choose how your payments grow, whether they increase every year, rise with inflation, or fall in your investment. Because of this flexibility, they make a great choice for you and your future.
How Do You Determine the Future Value of Your Growing Annuity?
To determine the future value of your growing annuity, you multiply the projected future value of your investment by the projected growth rate of your annuity to determine the future value of your growing annuity. It is the sum of money you have after making a steady stream of increased payments at a specified growth rate.
Given a steady interest rate and a fixed payment at a specific growth rate, you can easily calculate the amount of money you will have at a specific time in the future.
Thinking of Investing in Growth Annuities?
If you’re looking to make a regular investment, a growth annuity is a great choice. You can get payments that increase every year with a growth annuity as your money grows. However, we understand that dealing with all the computations can be overwhelming to some people.
Thus, at ABB Wealth Strategies, we pledge to assist our clients in planning their retirement and streamlining their savings. We have been in the business for almost four decades now, so we can assure you your finances are the least of your concerns.
Our technology and software, coupled with the knowledgeable advisors our company prides itself on, make investing in growth annuities easy for our clients. For more details on growth annuities, visit our contact page today.