How To Choose Short Term Annuities

If you are planning to invest in a long-term annuity, then you may be confused about the type of annuity that you should choose. There are two types of annuities, one is a long-term annuity and the other is a short-term annuity.

Long-term annuities are also called as life annuities. They provide a tax-deferred benefit for your future retirement. The money you put in the long-term annuity will be invested for a long period of time. You can withdraw the money from the annuity at any time without paying any taxes or penalties.

The major difference between the long-term and short-term annuities is that the former is available for people who want to save their money for a long period of time.

Short-term annuities are designed to help you save money in a short period of time. These are also known as immediate annuities. This type of annuity provides a lump sum amount immediately after you purchase it. It doesn’t require a minimum investment amount.

So, if you are confused about choosing a short-term or long-term annuity then let me tell you that a long-term annuity is the best option. It will provide you with a tax-deferred benefit. You can even invest your money in a mutual fund.

Here are some important points that will help you choose the right long-term annuity:

• You can withdraw your money from your long-term annuity without paying any taxes or penalties.

• The rate of return on a long-term annuity is higher than a short-term annuity.

• The cost of long-term annuities is lower than the short-term annuities.

Conclusion:

I hope this post will help you to choose the best long-term annuity for your future retirement. So, what are you waiting for? Start saving and start investing today.