When planning for retirement, many people seek an investment option that offers guaranteed payments at regular intervals. This is a smart move, as it ensures that you will have a steady income stream coming in after you retire. This guide will discuss the best investment option for guaranteeing regular payments after retirement. Keep reading to learn more!
Which Investment Option Guarantees Payments At Regular Intervals After Retirement?
One option for guaranteed payments after retirement is an annuity. An annuity is a contract between you and an insurance company, where you make regular payments into the account. The insurer agrees to make periodic payments to you after you retire. This can be a great option if you want a set monthly amount, as you can tailor your annuity payments to meet your needs.
Another option for guaranteed payments is a pension plan. A pension plan is an employer-sponsored retirement savings plan. Your employer makes regular contributions to the account on your behalf, and you can draw from the account after you retire. This option can be a great way to ensure a steady income stream in retirement, as your pension payments will be based on your years of service and salary.
What’s The Difference Between Annuities And Pensions?
The main difference between annuities and pensions is who makes the payments into the account. You are responsible for making regular payments into the account with an annuity. With a pension, your employer makes the contributions on your behalf.
Another key difference is how the payments are calculated. For example, annuity payments are typically based on age, gender, and investment history. Pension payments, on the other hand, are typically based on your years of service and salary.
The final key difference is how the income is distributed. With an annuity, you can choose to receive your payments in a lump sum or installments for a fixed period of time or life. With a pension, the payments are typically made in installments. Annuities also choose to give up control or not give up control of their retirement savings, whereas pension plans do not.
Both annuities and pension plans can be great options for ensuring a steady income stream in retirement. Which option is right for you will depend on your individual needs and goals. Contact us today to discuss the best retirement investment plan for you! We offer competitive rates and will work with you to find a plan that fits your budget.
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