There are numerous ways to accomplish your investing goals. Make sure you have considered alternatives before you make a decision. An annuity might be the right place for some of your money, but how do you know unless you have considered alternatives? Below you'll find alternatives to variable, immediate and fixed annuities.
A variable annuity, especially a broker-sold variable annuity, can have high fees, high surrender charges, and less than favorable tax treatment when compared to many other investment alternatives. For that reason, before you buy a variable annuity, compare it to other investment choices like index funds, no-load annuities and tax-managed funds.
An immediate annuity can be a good solution if you want to know you can not outlive your money. Once you buy an immediate annuity, however, you can no longer access your principal. Before you make such a permanent decision, consider alternatives to immediate annuities. The best solution may be to build a combination of income producing investments by using an immediate annuity along with one or more of the choices below.
A fixed annuity is a safe, secure investment that allows your interest to accumulate tax deferred. You can compare a fixed annuity to other safe investments like treasury securities, money market accounts, certificates of deposit and municipal bonds.