Advantages
of an Annuity
- You have a guaranteed regular income for
the rest of your life.
- It's tax paid.
- It takes the pressure off you by having
someone else look after your investments; you can now sit back
and enjoy your retirement.
- You may live a long time and make on the
deal, at the expense of the insurance company.
- You know for certain that your capital
will last your entire life.
Disadvantages of an Annuity
- If you die early, the insurance company
gets to keep all the money, although it's possible to secure
a guaranteed pay out period.
- The annuity is not protected against inflation,
although, again, it is possible to index link the annuity to
offer some protection.
- The tax paid status of the annuity may
be disadvantageous if you're on a low marginal tax rate.
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