Reasons Why Variable Annuities a Good Idea for Retirement

Variable annuities are known to give investors a wider option of investment—most people variable annuities to create a future income stream.  When you fund your annuity, your money will be tied to how the underlying sub-accounts are working. Different insurers may provide you with different options for investing your money. In the long run, investing in these annuities can provide larger gains on your money. This is why you should consider it an investment plan when retiring. Other reasons include:

Unlimited Contributions

Most retirement accounts have limits on contributions. However, variable annuity allow for unlimited contributions. This is a great benefit moreover for high-earning individuals. They can save as much as they want for their retirement.

These features of unlimited contributions make it flexible for individuals who want to keep their income away from taxes. It also allows investors to channel plan their retirement savings without being stopped by annual caps on how much they should save. This allows them to use their savings strategies according to their financial goals.

Insurance Protection

Variable annuities have both living and death benefit riders. This means that they provide a stream of income or a minimum account value. This means that the investors or their beneficiaries will receive certain benefits even when the market fluctuates. This gives them peace of mind knowing that whatever happens, their investments are safe, and their benefits will be paid. This is, therefore, a good choice to invest for your retirement.

Avoidance of Probate

Investing in variable annuities allows the investors to access their funds without having to go through long processes that may be costly. This is because these annuities are exempted from Probate. This feature also makes it easier for investors to transfer assets to their heirs.

Potential for Superior Returns

When you invest in stock subaccounts for a long time within the variable annuity, you may gain higher returns as compared to other annuities. Variable Annuity allows the investors to benefit from the market growth, which in return has a potential for higher returns. This makes variable annuities a better retirement investment option compared to other options.

Protection from Creditors

The funds held within a variable annuity are usually protected from creditors. This gives your retirement savings another layer of security. This protection safeguards your financial assets in case unpredicted circumstances occur.

With variable annuities, the principal investments are also protected from any market loss. This means that what you invested initially will be protected no matter the fluctuations in the market.

Conclusion

There are many reasons why investors should consider using variable annuities as a retirement plan for investment. Variable annuities have an option to make unlimited contributions, which gives you a leeway to invest as much as you can for your future. This investment also protects you from creditors, has the potential for superior growth, avoids probation, and also has insurance protections. With the above reasons, you can make a wise investment decision for your retirement.