Annuities to Meet Your Finance Goals

Annuities are yet another way to invest money that can gain tax free interest and are designed to meet retirement, build wealth or other long-range goals. Annuities can be set up where the individual makes a lump-sum payment or a series of payments up to a specified amount of for a specific amount of time. In return the annuity company agrees to make periodic payments to the individuals immediately or at a future date.

The interest on Annuities is not taxed until they are withdrawn and at that point they are taxed as regular income rather than capital gain rates. Some annuities may pay a death benefit for a specified amount. There are generally substantial charges for early surrender of annuities.

There are three types of annuities: fixed, indexed and variable.

Fixed annuities have a fixed interest rateand the annuity company agrees to pay you no less than that rate during the time that account is growing. These payments can last for a certain number of years or indefinitely.

Indexed annuities are tied directly to the stock market. The interest paid on this type of annuity will fluctuate although the company will still provide the face value of the annuity upon maturation regardless of the index performance.

A variable annuity is an annuity where you invest from a variety of investment options such as mutual funds. The rate of return and the amount of the periodic payments will vary according to the performance of the investments you have made.

Choosing to buy Annuities is a great way to plan ahead for retirement or as way to save for a long-term goal such as buying a house.

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