Annuity is an amount of cash paid annually for the repayment of a debt and interest charges. This is a reliable retirement strategy for investors who want to receive stable and periodic income payments in their retirement. It consists of part of the capital borrowed and the interests due. Basically, it can be variable or fixed.
Variable or Fixed Annuity
Fixed Annuity – When the annuity is fixed, the amount of payments remains the same every year: the share of capital depreciation increases while that of interest decreases. This allows the distribution of the sum of money the same way during the loan time, thus facilitating budget management.
Variable Annuity – in this case, however, the payment decreases during the time of repayment: the share of amortization of capital remains the same each year, but the interest is declining according to a predetermined schedule. With interest calculated on the outstanding principal, interest charges are more advantageous to fixed annuities. However, payments are higher in early repayment.
Annuity = financial interest + principal repaid over a year
Due to uncertainty of the economy, many people recourse to annuity to ensure that they will have enough money in their retirement. With social security checks being threatened by the nation’s national debt, it is only natural for people to look for other avenues that they will be able to follow in order to keep themselves afloat when the day of retirement comes. And annuities can do exactly that.
An annuity is a special financial product which works to collect and grow money over a period of time. Once it is effective, it is designed to pay out on a monthly basis based on the money it has accumulated. The biggest problem that people have when wanting to open an annuity is the initial cash that is required. What most people don’t realize is that they have equity in their homes that they can use to help jumpstart their retirement. By doing mortgage refinancing, or fixing your bad credit mortgage with a mortgage refinance, you can pull equity out of your home and use it to give you retirement account a jump start in the right direction.
Annuity Advantages
Some people get worried about raising the price of their initial principle balance when doing a mortgage refinance, but the truth is that even though it may take longer to pay off your house; the equity that you pull out of your house could grow to hundreds of thousands of dollars in an annuity account.
This makes taking this money completely worth it as you will definitely want to have money to retire on. Having money that you can count on for retirement is a great way to find some financial stability and some peace of mind in this crazy economy that we live in. Even with the economy being as unpredictable as it is, an annuity account can create a consistent revenue stream for you later on in life without having to worry.
As you can see, getting a mortgage refinance loan is a great way to pull out the initial cash that you need to secure your financial future in your retirement years. Make sure to do your research on different return rates and make sure you research different mortgage refinancing products that will help you to get the cash that you seek for this retirement account. By researching, you will ensure that you get the best rates out there.
