By Randell Jenkins

Retirement investing options through annuities have been one of the ways which consumers have found more security when it comes to investing in a way that will allow them to avoid outliving their income, but there are different options for investing in an annuity which individuals must consider for their particular retirement goals. Understandably, men and women are looking for ways to establish a secure income after they have retired and also one that will allow them to meet any expenses which may arise, like medical costs, and for this reason annuities may be worth exploring.

While annuities are not the sole investment that some consumers use, as many men and women will diversify their retirement portfolio with options like IRAs, their 401(k) plan, and annuities as well, but some advisors feel that consumers should at least explore options for investing in an annuity due to the fact that it can be helpful when it comes to finding a stable income later in life. In some cases as well, annuities can be sizable in their payouts, but this will depend on the amount an individual invests, their age, and the type of annuity they choose. However, an article on Kiplinger.com stated that, “Part of the reason for the bigger annuity payout is that each distribution consists of interest as well as a return of principal. But the real secret behind the beefed-up annuity checks is that you pool your risk with other policyholders.”

Yet, consumers will have to choose from either a deferred annuity or immediate annuity, if they feel this type of retirement investing account can be beneficial for their particular situation. When it comes to an immediate annuity, investors will receive payments soon after they have invested an initial sum of money, but a deferred annuity will grow and be paid out at a later time. There are some advisors who feel that an immediate annuity is more beneficial for someone who may be retired and, as an example, they have recently sold a home or have a large amount of money which they want to invest into this particular type of retirement fund, while deferred annuities may obviously be more helpful for someone who might be a few years away from retiring.

Also, there are some advisors who also feel that individuals who are considering putting money into an annuity should only do so after they have maxed out other retirement investment vehicles like a Roth IRA or 401(k) plan, as again, the more diverse a portfolio happens to be, the higher the likelihood that an investor will have a greater amount of security during their later years. However, when looking at annuities, there are usually fees that may be associated with withdrawal’s and if an investor takes money out of an annuity before seven years has passed, they will usually be charged a set percentage of their investment, which can be substantial depending on the size of a particular individual’s annuity.

While considering this form of retirement investment is one option that may allow more consumers to spread out investment opportunities after they have left their job, investors must not only look at the types of annuities that may be available but also different agencies which may offer investors the option to plan for retirement through annuity investing, as there will obviously be different fees that may be associated in this area as well. However, when it comes to whether an immediate or deferred annuity is right for a particular investor, or whether annuities should even be considered at all, this will depend solely on an individual’s particular financial position, their ability to invest, age, and what they may need from a retirement account so that they can avoid financial distress later in life, but for men and women looking for more stability in their income during retirement, annuities may be one method that can be beneficial in that area.