What is Annuity?

Do you feel secured with your retirement benefits from your company where you worked for almost all your life? With uncertainty of economy today no one is sure about their retirement compensation today, in a matter of time everything will vanish. Do not put all your eggs in one nest, try annuities. What is annuity in the first place you may ask? Just lately when I read the website about annuity, it is defined as a contract between you and the issuer wherein you give a capital or principal to the issuer whether in cash or in installment basis and in return the issuer will give you money in fixed value or variable value overtime. The issuer here is usually an insurance company.

There are two types of annuities:

Fixed Annuities are invested primarily in government securities and high grade corporate bonds. This investment is more secured but will not gain much interest than the variable annuities. Fixed Annuities are actually has guaranteed rates than variable annuities.

Variable Annuities are invested in selections of fund like mutual fund that is tied to the market performance that is why they have managers for this type of Annuity. This annuity is invested to most conservative to most aggressive investment like money market.

What is good with annuities is that there is no limit with the investment unlike with retirement plans. Invest in annuity now if want secured money rather than in stock market. Buying stock directly is dangerous if you are not familiar with this type of investment.

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