Pension Annuities

2008-12-29 10:44:28

( Business )



The Sad Reality About Social Security Pension Funds

Part of your monthly salary is deducted to become part of a retirement fund. For income tax purposes, you may have also invested in an individual retirement account.

However, these may not ensure that you will actually be able to retire in style when you reach 65. The funds that are locked away in your social security and IRA are not inflation-proof. So by the the time you retire, you may find that you will have barely enough funds for subsistence.

What are Pension Annuities?

Aside from your regular social security and IRA deductions, you should also consider investing in a pension annuity. It is a savings plan where you pay a regular sum for a specific number of years. You leave the money in the pension annuity fund until it reaches a maturity date.

Upon maturity, pension annuities pay a fixed amount for a certain number of months to you. You are free to do whatever you want with the pension annuities, which will definitely be able to supplement whatever you also receiving from your social security and IRA.

You can think of pension annuities as a kind of forced savings plan, because you need to pay a specific amount during a period of time to keep the plan in force. Otherwise, your plan will lapse and you need to pay a penalty to reinstate it.

Other Features of Pension Annuities

Pension annuities also carry an inheritance feature, in the sense that the funds can be transferred to your spouse or your heirs on the event of your death.

Some pension annuities also carry a health benefit, where you can receive supplemental income in case you are diagnosed with a health problem. So your annuity plan will pay you more than what was stipulated.

There are also joint life annuity plans, in case you would like to apply as a couple.

Where to Get the Best Pension Annuity Plan

There are sites which list out Prudential pension or other plans through the internet, and you can easily compare these plans in terms of their premium costs and annuity payout options.

You should also be aware that the best pension plan isn't necessarily the cheapest one, and that you should also consider the reputation of the companies who offer such plans.


All rights Reserved © Tradenet Services srl
Do not duplicate or redistribute in any form.