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Which Annuity Is Right For You?

Posted: 7/21/2010

An annuity can be a sound investment for a secure retirement.

(NAPS)-Annuities are in the spotlight these days as an increasingly popular way to help Americans achieve a secure retirement.

"People are living longer, and the prospect of outliving your money is very real," said Rich Lindsay, senior vice president of Life and Annuities at Symetra Financial. "Annuities are a great way to ensure your money lasts as long as you do."

When you buy an annuity, the insurance company has a contractual obligation to guarantee payment at the time you designate. Your money grows tax-deferred as long as it remains in the contract.

Here's a primer to help determine which type of annuity is right for you:

Immediate or Deferred: First, consider when you will want your money. If you need it right away, use a lump sum to purchase an immediate annuity, which starts paying out within 13 months. With a deferred annuity, you invest your money now, let it grow over time, then convert it to an income stream at some point in the future.

Fixed or Variable: Next, determine your risk tolerance. Fixed annuities offer a more conservative solution as they build retirement assets at a guaranteed interest rate. Variable annuities are riskier because account values are based on market fluctuations, but they do have the potential for higher rewards.

Consider Your Options: There are several options you can add to an annuity. For example, you can adjust payouts for inflation, select a death benefit that pays out to your heirs, or receive a lump sum in case of an emergency. Extra fees may apply with some of these options.

For more information about annuities, visit www.Symetra.com.

Photo Credit: iStockphoto

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