What’s Annuity and How to Choose the Best Retirement Plan for Yourself?

In the U.S., you should plan for retirement in advance. Like everyone knows, 401K, IRA, etc. are one type of retirement plans. The annuity is also one of many pension plans, known as the "security box".

U.S. annuity

The U.S. pension system is divided into three broad categories: social security benefits, corporate and government pensions, and personal pensions (including 401K, IRA, etc.). Typically, 401K is chosen by the company, and the IRA program is chosen by the individual. Each month, deposit money into a retirement account, choose and invest in a variety of products for you -- or find professional investors) and invest in the market, depending on market conditions.

An annuity is a contract between an individual and an insurance company, a retirement savings tool provided by an insurance company that is relatively less risky under any market conditions. After purchasing an annuity, the policyholder may receive a certain amount per month at the age of receipt, until he dies, and if the insured is still healthy after exceeding the insured amount, the insurance company must pay all the time.

Benefits of annuities

Annuities can be deferred tax, money put into the account, as long as they are not withdrawn can be temporarily untaxed, namely when the pension to pay tax. Benefits are high, and the tax rate is generally lower after retirement than at work, and without paying taxes each year, final benefits must be higher than the annual tax.

Unlike 401K or IRA, an annuity deposit is not available, which means you can put in the numbers you think is reasonable depending on your needs.

Money from other retirement accounts can be transferred to an annuity at the same time. There are many annuity products that pay dividends for many years in the first year or after each year, depending on the precise number of years of payment.

In addition to the life pension income received by the insured, the beneficiary can be designated and the beneficiary can receive the full amount of capital if the insured dies before receiving the annuity. Of course, if the policyholder has died, there is always a balance in the account that has not been collected, the beneficiary can also continue to collect.

When to buy an annuity?

When the stock market is volatile. The stock market is relatively risky, and an annuity is a good choice if you think the risk exceeds your psychological expectations.

Don't expect big returns, but be stable, especially if you want to see predictable returns.

Life insurance cannot be purchased.

I hope to have a stable long-term income and a better pension plan after retirement.