If the idea of a set guaranteed monthly income appeals to you in retirement, you may want to look at investing into a Payout Annuity.
Payout annuities defined
Payout annuities are insurance products. In this type of insurance, the investor is guaranteed a regular income every month. One’s savings are converted to a guaranteed income. The term can be fixed, or the investor can have this for the rest of his life. A payout annuity includes many features, benefits and options that can match a person’s income needs or financial situation.
Like other insurance products, a payout annuity payment is composed of principal and interest based on the type of annuity, amount used to purchase it, length of term and investor’s (and sometimes also spouse’s) age.
Types of annuity
Each of the following types or payout annuity is designed to suit a financial situation.
- Life annuity- payments given as long as you live; when you die, your beneficiary will receive the payments.
- Fixed-term annuity- payments given for a specific time frame; if you die before the term ends, your beneficiary gets a death benefit.
- Joint and last survivor life annuity- payments given to both you and your spouse as long as you both live.
Advantages of getting a payout annuity
- There’s a guaranteed monthly payment, so you’ll have a source of income after your retirement.
- There’s no risk that you’ll run out of savings or money to spend for your needs after retiring.
- Unlike other kinds of investments, it’s a low risk and a safe investment vehicle. This will save you from the worries and stress that uncertainty and high fluctuations bring.
There may be other sources of income available to help you out when you retire, but what you can get from payout annuities can be very important in your financial plan. That guaranteed monthly pay check gives you financial power and peace of mind – two things a retiree like you needs in his twilight years.