There are several investment strategies for ensuring that retirement is a time that is as free from stress and as financially stable as possible. One of the most popularly used of these strategies is investing in an annuity, which can guarantee a certain level of income for a designated period of time. There are a variety of different Types of Annuities, each with their own benefits and drawbacks. Choosing the right annuity can be a large investment of time and effort.
However, researching and ultimately choosing the best annuity for each individual’s unique financial situation can prove to be incredibly cost effective and lucrative.

Any annuity is a way in which an investor can plan for their retirement years, transforming part of their pension pot into a long term financial solution to be used during their retirement. However, choosing the right annuity can make all the difference when trying to plan for years spent in retirement.

Lifetime Annuities
A lifetime annuity is a way for those planning for retirement to use part of their pension pot to guarantee a certain level of income for the rest of their life. With this type of annuity, the investor is guaranteed a determined level of income for the remainder of their life, however long that may be. However, there is obviously no way to predict the lifetime of the investor. So there is no real way to know how long the payments will last. With this type of annuity, the payments stay constant, which means that they may actually end up losing value, depending upon inflation. There is no real way to increase income or payout with this form of an annuity. However, one positive aspect of this type of annuity is that the investor can always plan to have that designated amount of money, as it is guaranteed for the lifetime of the investor.

Variable Annuities
Variable annuities can sometimes be accompanied by great risk. However, they can also produce great reward. With this type of annuity, there is a much greater opportunity for asset growth, given that there are a range of investment choices available. The value of the investment differs depending on the investment options that are chosen. The investment options typically include mutual funds that invest in bonds, money market instruments, stock, or a combination of the three.

Those who choose this annuity strategy are those who are really looking to grow their asset and investment. However, for those who invest in variable annuities, it is crucial to keep in mind that that asset can be compromised. There is both opportunity for growth as well as opportunity for loss.