Getting Smart About Annuities – Article Example

The paper "Getting Smart About Annuities" is a great example of a business article review. The article is informative and offers extremely imperative points regarding utilization of annuities, despite its veiled traps and fees. Despite the risk that annuities hold, the article offers important information on ways utilize these risks to fabricate a pension. In accordance to the article, most retirees considered serving as personal pension managers despite its intricacy (Tergesen & Scism, 2009). However, with the current stock-market downgrade, individuals are purchasing annuities to take up their task as pension managers. Financial advisers never recommend utilization of annuities since annuities barely present the prospect for huge returns, without forfeiting a certain percentage of the presented guarantee (Tergesen & Scism, 2009). However, investors possess little knowledge concerning the strategies to approach annuity in order to attain full benefits. Investors ought to decide their intended buy, on whether to invest immediately or progressively, and the investment plan for the remaining amount. With regard to the article, immediate annuities offer considerably elevated quantities of sustainable income, considering the presented terms and conditions (Tergesen & Scism, 2009). According to immediate annuity, extra income emanates from both the interest together with a fraction of principal that an individual offers to the insurer. The payments are sustained until a person dies despite of whether one has recovered the full amount that was presented for the annuity. However, one may purchase products that usually allow continued payments to heirs for a certain period under immediate annuity.  Longevity rider serves as an alternative approach to ensure continued support to individuals and their heirs. The product offers returns for life although the payments usually commence at 80 or 85 years. Individuals ought to purchase this option after retirement since earlier join makes an individual liable to pay for some substantial settlements. The other alternative is the purchase of immediate annuity in fragments for a certain period since it diminishes the probability of purchasing at an inopportune period (Tergesen & Scism, 2009). Additionally, it allows one to make adjustments concerning annuity purchases under various conditions. The strategies that an individual utilizes are reliant on their requirements and preferences.