If you’ve decided to invest money in an annuity that can be used in retirement or at some other later date, you have some options that will allow you to select the annuity that best suits your needs.

While a fixed annuity provides the annuitant with a guaranteed rate of interest on their initial deposit, with a variable annuity the amount they receive will depend on the success of the investments that were made with their initial lump sum. This means that with a variable annuity the holder could actually end up receiving more than they would had they purchased a fixed annuity.

With that being said, the owner of a variable annuity will still be able to receive guaranteed payments, although the amount of those payments will depend on the dividends of the investment. Some may choose to receive monthly payments while others will select a specific term in which they will receive money at regular monthly or even yearly intervals.

One of the biggest benefits of a variable annuity, in terms of how it relates to retirement savings, is that your investment will continue to grow without you having to pay taxes on that money. It is only when you start receiving payments that any of that money will be taxed as income. The good news, too, is that if you don’t start withdrawing money from the annuity until after you’ve retired, you will likely pay less tax on that money than you would if you were still employed.

The last feature of a variable annuity that makes it a popular choice among retirement savers is the guaranteed death benefit. When the variable annuity holder dies, they are able to leave either the remainder of the money left in the annuity or a guaranteed death benefit to a beneficiary.

A variable annuity may be the right choice for you and your retirement savings needs. To learn more about this and other annuity options, contact licensed experts at TermLife-Insurance.com.