Purchasing an annuity is one thing that you might consider as you are approaching your retirement age and even if you still have many years until you retire. Annuities are products of the insurance industry. They will pay you an income during your retirement, so they are a great choice whether you are a money investor or you just want to have a steady stream of income when you reach a certain age. An annuity works in the same manner wherever you are – in Bloomington, Illinois or any state. You make a purchase and the company will make a payment or a series of payments on the date(s) specified in your contract. You can receive your income from Bloomington, IL annuities on a lump sum, monthly, quarterly or annually, depending on your choice.
There are basically 2 types of annuities – deferred and immediate. The deferred annuity is the type where you invest your money for a period of time. When you retire and you are ready to start receiving the fruits of your purchase, then you can withdraw. Deferred annuity accumulates money. On the other hand, an immediate annuity allows you to receive payments after your initial investment has been made. This type of annuity pays out money shortly after your first payment.

The money that you put in Bloomington IL annuities are tax deferred. When eventually you make withdrawals, what is taxed are your earnings, at rates in accordance with your regular income.

Annuities offer the biggest benefit to a purchaser because you are allowed to invest a big amount of cash without paying taxes at once. Compared to IRA and other tax deferred retirement accounts, Bloomington IL annuities do not have annual contribution limits. You can put in more money for the time when you retire, which is very useful, especially when you are trying to catch up because you are very close to retirement age. All your money will add up month after month, year after year, without worrying about any tax bill.

When you cash out on your annuities, you may opt to receive a lump sum payment. However, most retirees would like to have guaranteed payments for a specified period of time or their entire life. They feel more comfortable when they have a steady stream of income. Bloomington, IL annuities serve to complement SSS, pension plans and other retirement sources of income.

There may also be some disadvantages when it comes to investing in annuities. As we know, these insurance products are sold by insurance companies or brokers and these people collect a commission from these sales. Typically, it’s of approximately 10% . There are also surrender charges that you might face if you decide to withdraw your money prematurely and the withdrawal fee can range from 7% to 20%. However, some of these expenses, such as the surrender charges, can be avoided. And despite the listed disadvantages, an annuity is still profitable and you will be paid your profits when you reach retirement.
Investing in annuities http://www.askewins.com/category.aspx?id=LIFEHEALTH is a good option these days and Bloomington IL annuities http://www.askewins.com/annuity/quote_form.aspx has good schemes to offer.