Annuity is an insurance product that can guarantee to receive amount of money regularly as result of investment until the end of annuity contract. Why should you consider annuity investment for your retirement?

Annuity as an insurance product offers insurance benefits such as death benefit, and protection of your investment to beneficiary.
While annuity as an investment offers investment benefits such as income protection for life, relatively higher interest rate than CD or any bank investments, and tax deferred benefit.

Insurance companies use your annuity investment to invest in bonds and stock market depends on annuity product you choose. According to its interest rate, annuity can be categorized into fixed annuity and variable annuity.

Fixed annuity is an annuity that can guarantee a minimum annuity payment regularly no matter what happens. While fixed annuity most enemy is inflation, there is fixed annuity variant that may protect your investment against inflation. Instead offers a fixed interest rate, equity indexed annuity set earns to an equity index such as Standard & Poors 500 Composite Stock Price Index (the S&P 500).

Variable annuity is the most complex annuity type. Variable annuity only sold by prospectuses, your investment is not guarantee by any party and its value may increase and decrease depends on performance of your investment option.

Many financial experts advice not buy annuity until you have maximize all your other retirement saving such as 401(k) plan and IRA. However, there is an option to use annuity investment as your IRA investment. The advantage of this option is higher interest rate over other kind of investments such as CD. While consequence is there is no additional tax deferral benefit, because IRA is already tax deferred.

Dont forget to consider about tax, many people want to change to lower tax bracket during their retirement. Well, the decision will vary based on your expectation of retirement lifestyle.

As conclusion, choose well-known insurance company over higher interest rate promise. Request a prospectus, read it, understand it features and benefits as well as fees and charges. Annuity is a complex product, you should contact financial advisor to identify which annuity product or annuity type suit for you. The past do not equal the future rule apply in annuity investment as well as in life.

About the Author

Allya Reeve is independent writer who run Annuity Reveal website to help most of people who seek out quality yet concise information about buy annuity and sell annuity.

For more information about annuity investment and retirement visit Annuity Investment for Retirement page.

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There're many benefits of 401k retirement plans but the most beautiful benefit is when your employer matches your contributions to the plans to a certain point. The matching boils down to your employer's discretion and financial capability. The match could be 25 cents, 50 cents or more to the dollar or dollar for dollar.

This means that each time you contribute, your employer adds money, for free! Free money for your retirement! Greater chance for you to retire in style and in comfort......

So matching fund from employer is the STAR benefit of 401k retirement plans.

What other benefits can you get from 401k retirement plans, besides this?

Let's see:

• All your contributions are on a pre-tax basis. By deferring money to your 401k before taxes, you not only avoid paying taxes now, but you reduce the amount of taxable income that the government can take
• When you withdraw from your 401k, you'll pay federal and state income taxes. But if you relocate to another state when you retire, like Florida or another state which doesn't have a state income tax, you save money
• In case of emergency, you can withdraw money from your 401k account. However, if you want to withdraw from your account penalty free, you should wait until age 59. If you withdraw before age 59, you'll have to pay a 10% penalty
• In some cases, you may be able to borrow money from the account, penalty free. However, if you leave your job or are laid off, before paying back the loan, you may be required to pay the full amount at termination. It's always good for you to check first before borrowing money from your 401k account
• If you turn 50 years old or older during the calendar year (January 1-December 31) and you're already making the maximum contribution, you can nonetheless make an additional "catch-up" contribution, to boost your savings
• Any gains from dividends or investment earnings growth are tax-deferred. This can mean many years of tax deferred growth. Tax deferral can have a powerful impact over time to increase your funds for retirement
• Flexibility - you can decide how much you would like to save and you can increase, decrease or even stop your contributions. If you change job, you can rollover your existing 401k savings into an IRA (Individual Retirement Account) or you can choose to transfer it to your new employer's 401k

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