Thursday, August 26, 2010

Sensible Retirement Planning - Spending Today For Retirement Income Tomorrow

By Robert C Eldridge Jr Platinum Quality Author

Do you often end up buying things, and then wonder, do I really need it? If yes then read on. No we are not talking about shopaholic tendencies here. The fact that you frequent the market and buy stuff surplus of your need shows that you do have disposable income. Often find yourself confused as to what do I do with it. Invest it? Secure my future with it? Donate it to get tax rebates? Well, you can have all of it together, in the form of 'annuities'.

With annuities, you keep aside a portion of your income for your retirement planning. On this income, you are deferred your tax by the government. You can also invest this amount and avail compound interest benefit too. Astounding proposition?

Let's understand in further detail. The insurance companies offer a specialized product called an annuity. It is has the potential to create a steady income. While you are paying out a premium to the give the insurance company, it is feeding it into investments. Depending on your need, the insurance company can provide you with a supplement income or a retirement income as desired by you, either monthly, quarterly or annually.

The Insurance company follows certain discreet guidelines to arrive at a payment figure that you shall receive. If your age is towards the older curve when you start receiving your payments first, then the amount would be more. The more aged you are, the more money would you need for your daily requirements, and hence more the payment you receive. One can delay the starting time of their payment of retirement income as late as the age 70 and keep accumulating tax-deferred income till then.

But even this amount is sometimes affected on the basis of whether your policy is for a life time or is it for a stated short period. So, if your period is 10 years, for example, then they can dole out payments accordingly with help of accurate calculations. But if you opt for a life time plan, then they can only assume your lifespan and stretch it longer. And to be on the safe side and not run out of money while they are still liable to pay, they instead give smaller payments to you. So shorter the period, more will the amount of payment be.

There is also a kind of annuity called as immediate annuity. In it you have the provision to start getting your money as soon as you desire. You can also have them delayed up to a year with some companies, but not later. In fact it is recommended that you should avail them as soon as possible. You can also convert your regular annuity into an immediate one if you want also. This process has come to be called as annuitization.

Annuities are indeed the right option for you to invest your money in for your retirement days. Instead of shopping for irrelevant stuff, spend on what you need or will definitely need in the future - your retirement income.

Visit for more Annuity and Life Insurance Tips and Tricks.

Call Robert Eldridge directly at 800-643-7544.

Robert Eldridge holds over a decade of experience as a multiline agent in multiple states and currently serves on the membership council of the National Association of Insurance and Financial Advisors.

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