An annuity is an insurance product that pays out income, and can used as part of a retirement planning strategy in Seneca. Annuities are a popular choice for investors who want to receive a steady income stream in retirement. Here is how an annuity works: your make an investment in the annuity, and then it makes payments to you on a future date or series of dates. The income you receive from an annuity can be paid out monthly, quarterly, annually or in a lump sum payment. The size of your payments are determined by a variety of factors, including the length of your payment period. You can opt to receive payments for the rest of your life, or for a set number of years. How much you receive depends on whether you opt for a guaranteed payout (fixed annuity) or a payout stream determined by the performance of your annuity’s underlying investments (variable annuity).
The biggest advantages annuities offer is that they allow you to put away a larger amount of money and defer paying taxes. Unlike other tax-deferred retirement accounts such as 401(k)s and IRAs, there is no annual contribution limit for an annuity. That allows you to put away more money for retirement, and is particularly useful for those that are closest to retirement age and need to catch up. All the money you invest grows year after year without any tax bill from the government. That ability to keep every dollar invested can be a big advantage over taxable investments. When it comes to planning your financial future, Black Harbor Wealth Management is one of the best wealth management firms. Let our wealth managers handle your private wealth management needs and secure the best future possible.