What is the Present Value of an Annuity? The present value of an annuity is the amount of money that a person can receive in exchange for a certain amount of money at a fixed rate of interest. The higher the interest rate, the lower the future cash value. It also depends on the type of annuity, a person holds.

Many people who are retired but still have a significant amount of investments need to understand this concept to properly determine their future income tax return. There are several types of annuities available and all require consideration, including: variable, fixed, indexed, and universal.

Variable annuities are designed to earn a certain amount of interest, with a predetermined monthly payment. The fixed annuities offer a fixed interest rate and are guaranteed by an insurance company. Some of these plans include a guaranteed income as well. Fixed annuities are typically purchased with funds from the estate or savings of a deceased person. This makes it important to have legal counsel when buying a fixed annuity since some policies will pay a fixed value after a certain period of time.

Another type of annuity available is the indexed and the adjustable annuities. Both have varying rates of interest, which will vary with the state of your life and with the market. While indexed annuities are most popular, they are not without their risks and should be evaluated thoroughly before purchasing.

A final type of annuity is known as the universal annuities. This type offers fixed rates of interest, which can vary from year to year depending on the economy. It may not be possible to make future payments based on the market, therefore there is a guaranteed annuitant.

When evaluating an investment options for retirement planning, the future payment value, whether fixed or variable, is a critical aspect of consideration. It is important to consult a qualified financial advisor or attorney in purchasing any type of annuities.

For those who currently do not have retirement plans, it is important to consider an investment option and plan to work until you are no longer able to work. When planning, it is important to plan for future needs, because retirement is not assured, and you will likely be working in your retirement.

It is possible to increase your life expectancy significantly by investing in a diversified portfolio that includes stocks, bonds, mutual funds and insurance. These investments offer a variety of different ways to generate retirement income and provide financial protection should something unexpected occur.

If you need Annuity Quotes Online it is easy and simple. Just fill out a short form and receive a list of different annuity quotes from reputable and experienced brokers. You’ll be presented with a number of annuity plans and you are in control of selecting the best one.