As we know, the COVID 19 is the greatest threat that we currently live, it has separated thousands of thousands of families due to the infection and many families in the United States have lost their jobs and even their savings. In the next article we present you additional programs that you can use to face this crisis and your future retirement.
An Annuity is a contract that provides income for specific period of year, or for life. An annuity protects a person against outliving his or her money. Annuities are not life insurance, but rather a vehicle for the accumulation of money and the liquidation of an estate.
According to what has been mentioned, annuities are not life insurance but it provide economic stability, which it means, it protects a person or help outliving with his or her money.
But how it is work?
Most people have basic knowledge when it comes to saving, they automatically think about opening a saving account at any bank, but, do they have concern about the following considerations?
- Account maintenance
- Bank administrative expenses
- The earning low interest
So, the way it works is that you deposit some money and by keeping your money in that account you earn interest which makes your money go up. But the banks charge it maintenance for keeping it open plus the bank’s administrative expenses. So the question it is……… are we making or losing money?
Now, on the other hand, there retirement programs that many of you already know, however I like to call them risk programs, why? Well now I explain it to you.
These programs are offered by employers, where a certain amount for your retirement is set by you and the other part by the employer. And that money together the companies invest it in the stock market, which is fine, because if the market goes up you win, but……. What if the market falls?……….. then you lose, so we are at a constantly in risk, that over the years we do not know our money will end.
But what if I told you that there is a contract that allows you to accumulate money and that it is not being managed by the stock market.
How does it work?
Let’s says that in the contract you decide to contribute to your retirement a certain amount of money, well, the company may keep 4% for example, to invest in the market, right?…….. So any excess of more than 4% it is a credit for the annuitant, that is, if the interest earned is 12%, the company may keep 4% and her remaining 8% for the annuitant. In other words, if the market increases, then your money stay the same, as if nothing happened (you don’t win or lose).
