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For future investments, annuities may be an option

Posted On Mon, December 7, 2009

Annuities may be one option for investors who are looking to their future, though personal financial situations should be taken into account when making a decision.

In a recent posting on her website, financial expert Liz Pulliam Weston posted a letter she received from a reader whose brother has frequent seizures. As a result, the chances of him getting steady employment are small, which means he has to live off his investments. The reader was curious as to what combination of investments would be best.

As is the case with most financial questions, it depends on the particulars in a person's finances. For example, a fixed annuity could be a good bet. However, it might take a good amount of capital in order to invest enough to have for the future.

"He also would be buying the annuity when interest rates are quite low, which means he would get a smaller payment than if he bought when rates were higher," Pulliam Weston wrote.

Other options would afford the brother a larger variety of options. However, there would be no guarantees that these would give him a return that could guarantee being able to live off it in the future.

Along with fixed annuities, consumers might want to consider variable annuities. However, the Insurance Information Institute notes that unlike fixed annuities, the variable type are tied to things like the stock market, which means they could be buffeted by volatility.

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