Best Annuities of 2019

Thinking about investment as retirement nears. You want to choose a manageable investment option, as this helps you not constantly worry about how much money you have put away for your future.

By investing in an annuity, you provide yourself with two investment options. This simplifies your choices in terms of how you want to invest your money once you enter retirement.

An annuity is a contract you establish with an insurance company. It provides you with either a guaranteed return or a guaranteed income depending upon your preference. Once you invest in an annuity, you can either provide a lump sum of money to the insurance company at the time of establishment or you may regularly pay into your annuity. There are several variations of annuities in which you can invest. Because it is such an important financial decision, you must take the time to understand each type of annuity before making any investments.

What Types of Annuities Are Available?

Many annuity providers have different annuity variations available. Working with an insurance company directly helps to eliminate some of the confusion surrounding your choices. The primary annuities to choose from include:

  • Income annuities are comprised of two separate options, an immediate and longevity annuity. Each type provides you a guaranteed income instead of providing a guaranteed return. When utilizing an immediate annuity, you choose to receive your guaranteed income immediately after you make your investment with the insurance company. If you do not need to access your income right away, opt for the longevity annuity. Picking the longevity annuity provides you guaranteed income at a future date of your choosing. A longevity annuity can be paid out over the course of several years or you may stretch the income to last for the rest of your lifetime.
  • Fixed annuities give you a guaranteed return on your investment over a set period. These annuities function like a 401(k) or an IRA. The funds placed in a fixed annuity grow within a tax-deferred basis. Attempting to withdraw your return before the agreed upon period results in a penalty, though you are usually able to withdraw the return without penalty once you are 59 and a half years of age.
  • Variable annuities offer the chance to receive a higher return on investment, though there is usually more risk associated with these investments than other types of annuity. The payment you receive through a variable annuity is based upon the performance of the market index, meaning you may end up with a smaller return or a limited income.
  • Qualified longevity annuities (QLAC) are available for investors who do not have the savings needed to cover the cost of the investment up front. By choosing the QLAC option, you get the ability to build your retirement income slowly without having to worry about paying for your annuity when the time is most practical to invest.

Is an Annuity Right for You?

Before you invest in an annuity, you must decide whether an annuity is your best retirement option. Compared to a traditional investment account, annuities provide roughly the same payout. One of the biggest advantages of an annuity is accessibility.

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You may be able to earn more through a traditional investment account, but you must be familiar with investments in the first place. Annuities are also a better choice for workers who have already maxed out their pretax retirement account and need a secondary account. Finally, annuities are a good choice for any investor who considers the stock market too risky.

Annuities at Fidelity

Once you picked the type of annuity you wish to invest in, you must select an insurance company with your chosen option. One of the most reliable companies heading into 2019 is Fidelity Investments, which offers several annuity plans. Through Fidelity, you can establish a fixed or variable annuity plan, though the variable plan is equipped with a lower annual fee than the fixed annuity option. Additionally, Fidelity Investments provides customers with tax-deferred growth annuities.

Other companies may not feature this option. There are numerous in-person financial centers overseen by Fidelity Investments. You can visit the financial center at any time if you have questions or concerns regarding your annuity. Working with a professional is the best way to guarantee you are picking not only a profitable plan, but a plan you understand.

Annuities at MassMutual

MassMutual provides investors with guaranteed interest annuities as well as market exposure annuities. You can speak with a MassMutual representative in person or through the MassMutual website. In addition to providing guaranteed interest and market exposure annuities, MassMutual offers:

  • Variable annuities.
  • Fixed annuities.
  • Income annuities.
  • Index annuities.

With a MassMutual annuity, you gain lifetime income payments and living benefits. Any investors who require death benefit protection can establish their protection when creating an annuity with MassMutual.

Annuities at Vanguard

When signing up for the Vanguard Variable Annuity, you cover the cost of the initial investment without worrying about paying a commission fee to your insurance agent. Once you have established your annuity, you can easily transfer money from either your personal checking or savings account into your annuity through Vanguard’s Annuity Express feature. This does not cost anything extra as it is a guaranteed benefit for all Vanguard customers.

Additionally, Vanguard waives surrender charges for all customers over 59 and a half years of age who want to remove their guaranteed return from an established account. Vanguard provides around-the-clock customer care via phone, social media and email, as well as in-person service. If you need to make an adjustment to your income or you have questions regarding your account, you can contact Vanguard support directly at any time to receive assistance.

If you have already established an annuity with another insurance company and decide you want to make a change, you can transfer your annuity into a Vanguard account with a few simple steps. A Vanguard representative can walk you through the process and ensure you receive the benefits you did not gain from your previous insurer.

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