The advantages of an annuity Source: Engineer Your Finances

An annuity is the sum of money that is paid to an employee at the time of retirement. This payment is not provided by only the company, but a small portion (percentage) comes from a deduction from the employee’s salary. The annuity can be claimed after a certain number of years of employment or at the time of retirement. It is generally the choice of the employee. The following are some of the advantages of the annuity:

  • The employee can use the money to make different investments.
  • The taxation is deferred on investment growth.
  • The employee can withdraw a percentage of the annuity instead of all at once, but there are some conditions if you are withdrawing the payment before the age of 59.
  • The annuity is also useful for medical care support.
  • If you withdraw the annuity amount at the peak years then you will have to pay less taxes are assigned.
  • The annuity amount serves as a complement to other sources of income after retirement, such as a pension payment.
  • The employee can use the annuity to start a business to earn more money for retirement.
  • Annuity payments can be included in a will for a person’s children to be used for their future.

 

 

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