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Everyone who is in gainfully employment at the moment worries about the future when they may not be able to generate any more income due to old age or any other form of incapacitation. While many people contemplate about setting up an enterprise, many people are never able to rise beyond the dream to make it a reality. As much as it can be too complicated, the cheapest option for most is the investment ion fixed indexed annuities.
It is important to note that there are so many pension investment schemes available for many people to choose from and the above version is just one among the many. Each version of investment has been designed to serve certain groups and to provide variety so that each potential investor can identify a scheme that suits their needs appropriately.
A major concern for many investors in the pension schemes is the taxes and the inability of their funds to benefit from the prevailing market conditions. It is always common to go for a scheme that provides a certain interest rate on your investment over a very long duration of time considering the fact that such plans last for decades.
It is however always very painful when you enrolled into a scheme that offered interest rates that looked good at the time but have since become rather exploitative as market trends change. In these situations, many people often wish they had the ability to transfer the funds form the seemingly unprofitable venture to a new one that can guarantee more interest.
This problem has been a major born of contention between the managers of long term savings plans and their policy holders and some people thought it fit to design programs that have some flexibility in order to help in resolving the discontentment that arises from these kinds of schemes. When dealing with fixed indexed annuities, you are able to get all the benefits of other forms while ensuring that you also benefit from any changes in the market rates on your investment.
There are other plans that could compromise your principal amounts such as the investment plans that do not allow you to adjust or even withdraw your amounts in the course of the plan unless you are ready to be penalized for it. Such plans can leave you feeling so frustrated and making losses as you watch since the consideration of transferring your funds to another plan is often too costly and will attract as much as 10 percent in interest rates as penalties.
The advantages of having fixed indexed annuities are further compounded by the fact that you will get a tax deferral just like many other plans. By tax deferral; the investor is privileged to have all his funds put into the plans without getting taxed according to the market rates. Taxation will only be deducted when the funds are eventually withdrawn after the maturity of the scheme.
The interest rates that one gets when investing in the fixed indexed annuities are always the same as those trending in the stock markets at any given time. This means that you investment will grow just as they would if you had shares in the stock market.
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Robert Eldridge
The AnnuityCampus Blog 