When you want to invest in annuities, you will naturally want to find the best possible rates. A lot of people think that the best annuity rates are those with the highest interest. This may be true for some people, but certainly not for everybody. There are actually a number of considerations to make, not in the least your personal financial goals.
How To Find The Best Annuity Rates
First of all, you should only deal with a reliable and trusted broker. While it is very important to find the highest interest rates, you should also look at how flexible your contract is. If you withdraw your money before the end of the contract, you will usually have to pay a significant fee. Hence, that is something to look into.
Investing when rates are as high as possible is always a good idea. If you choose a long term annuity, you will usually be offered better rates. However, these also come with the highest penalty rates. As such, you need to think about what your personal goals are.
Next, think about whether a variable rate or a fixed rate annuity is best for you. If you choose a variable option, economic changes will influence your investment, and this means your yield can drop or rise. If you are someone who enjoys taking big financial risks because the payoff can be so good, then variables are the best annuity rates for you. However, not everybody is able to take that kind of risk, which means that fixed rates would be better for them.
The real balance you have to find is whether you want a high interest rate, or a flexible contract. Consider, for instance, that an unexpected emergency could happen in your life, which means you need to access funds straight away. If it is likely that this could happen to you, for instance because you have an elderly, ailing relative, then you will need to choose a more flexible contract with the lower interest rate. Naturally, when you sign up to an annuity contract, the goal is to make sure you don't withdraw it until the end of your contract. However, emergencies do happen.
Another thing to consider is bankruptcy. Luckily, quite a few states now offer safety nets, which means that if your annuity holder fails, you will be protected to a certain degree. This doesn't necessarily mean that you will get your full investment back, however. This is why you must work together with a professional provider, so that you know what would happen in the worst case scenario.
Annuities are excellent investments in terms of preparing for your retirement. However, they are investments, and investments are risky. The more you can invest, the more yield you could have. At the same time, the more you invest, the more you stand to lose. This is why, as stated at the start, the most important thing is to consider your personal financial goals. From there, you can find the best annuity investment for your needs.