1. Safety – Insurance companies are forced to set aside $1 for every $1 invested into annuities. Banks fail many times because they take $1 and make $10 in loans that go bad. Annuities do not do this. A banker I used to work with had a huge penny on her desk. She used to tell bank customers that the penny was more than anyone ever lost in a fixed annuity.
2. Guaranteed income for life – Annuities can fill in the gaps when social security, pensions and other retirement accounts do not provide enough retirement income. Annuities allow you to take a lump sum today and create a steady stream of income paid monthly, quarterly, or yearly.
3. Reasonable returns – Traditional fixed annuities provide a safe alternative to bank CD’s and savings accounts. Some uncapped index annuities have earned 7-17% in specific years. You earn a portion of market upside without risking your principal. Some of the gains, none of the losses.
4. Tax-deferred growth – Annuities offer triple compounding on your interest. Earn interest on your principal, interest on your interest, and interest on the money normally lost to taxes.
5. Long Term Care Benefits – Some annuities offer 200-300% of your initial deposit in long term care benefits with an optional rider. There is no cost, and everyone qualifies regardless of health.
6. Leave a Legacy – You can leave a lovely one a monthly, quarterly, or annual check. This can be especially beneficial if you think they might not spend it wisely.
7. No fees – Many fixed, indexed and income annuities have no fees whatsoever.
Bonus Reason – Some annuities offer up front bonuses on deposits up to 10%. Example invest $100,000 and receive a $10,000 bonus. Bonuses are usually attached to longer term products which may or may not be right for your situation.
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