Annuity or Savings Plan?

Investopedia.com said something very true, which is that most of us hope to live until a ripe old age, but longevity can have perils. Among them is the risk of outliving your money. I don’t know about you, but I think my money should outlive me, not the other way around. A good way to ensure that there is money coming in when we get older is to invest in an annuity or a savings plan.

An annuity is a contract with an insurer whereby you agree to pay the company a certain amount, either in a lump sum or through installments. In turn, the company makes a lump sum or series of payments to you at some future date. Sometimes those payments last for a specific time period like 10 years but annuities also offer lifetime disbursements. It is a great safety net for when we get older.

A savings plan is a flexible, affordable retirement investment plan which allows you to accumulate cash for long-term needs. The plan's maturity date should be between 50-70 years and at that time, you can get a tax-free lump sum and invest the remainder. The interest accumulated on this plan is very encouraging to say the least. The returns are even better if left until 60+ years.

Both options are key elements in retirement planning because they allow you to contribute toward your future cash flows. These plans can be subscribed to through some commercial banks and most insurance companies. The signup process is short and the agents are usually very helpful and knowledgeable. An annuity or a savings plan is beneficial even before retirement age because a percentage of the annual contribution is deductible for tax purposes. Isn’t that great? 

If you haven’t done so, I would definitely recommend that you put one or both of these plans in place. Your future self will thank you later.