In Louisiana you can start different types of annuities. In this article we want to look at a deferred annuity vs immediate annuity In Louisiana.
This will help you learn the basics of both of these types of annuities. Hopefully you will be able to form an opinion as to which one is best for you if you buy one in Louisiana.
What Are Annuities?
People buy annuities so they can have income when they retire. They purchase annuities through an insurance product.
Whether people have enough in their Social Security account, or retirement account such as a 401(k), an annuity is appealing if you have extra money to invest over the life of the annuity.
An annuity is a contract with an insurance company where they pay you on a preset schedule. You have the option of choosing whether you want an immediate or deferred annuity. Let’s talk about why you would choose one over the other.
Deferred annuities allow you to leave your funds sitting in an account and some people do this for many years at a time. With a deferred annuity you can put all of your money down upfront.
You make additional payments into it in lump sums. Once you fully fund the annuity it sets in the account and continues to accrue interest over a period of time.
When you go to withdraw your money you can take it all at once, or you can have with drawl set up to pay you over a schedule that you determine. It’s important that you pay attention to the contract and know what your options are before you decide on this type of an annuity. You will not be able to get your money until you’re at least 59 1/2 years old.
With an immediate annuity you put in a lump sum of money upfront and immediately start taking monthly payments back from the insurance company. Retirees will do this as a way to continue to earn some interest on their retirement funds while still having monthly income.
Key Points On Choosing A Louisiana Annuity
Here’s a few key things to determine when choosing your annuity. Some people who like to save money do not like annuities because their investment is tied up for years and the fees can be high.
This is true for people making both deferred or in immediate annuities in Louisiana. Often workers will get a better return on their money when they put it into a 401(k) or an IRA.
A reason a person might want to put their money into an annuity is if they’re going to retire soon, or already have retired. Maybe they want to earn some money additional income before they receive their money back.
An annuity is guaranteed retirement income so this could be an option for the retiree. When you use retirement savings to buy an immediate annuity you know you’re going to get your money.
You do not have to worry about it. This is in contrast to the ups and downs that somebody in a 401(k) might experience due to what’s happening in the US economy and marketplace.
In Summary: Deferred Annuity vs Immediate Annuity In Louisiana
It’s important that you thoroughly understand all the fees and exactly what you’re getting in your annuity when you purchase it in Louisiana. In Louisiana here at Best Note Brokers we can help answer those questions. Annuity contracts can be complicated.
We help take the guesswork out of it for you. Get all of your questions answered first. Contact us or Call Us: (833) 511-1234 at to start the process.