How an Annuity Certain Helps Finance Different Needs

Annuity payments for a specified period of time.

Meet Bob and Tamsin

Bob and Tamsin run a bakery. Bob does the baking and handles the ovens in the back of the bakery, while Tamsin serves customers and manages their income. ‘Retirement? Not for a while yet!’ says Tamsin with a smile. Both of them are in their early fifties and keen to continue. ‘The bakery does well and we both like working in it’, Bob adds. Yet they have already bought an annuity, which generates regular income. Tamsin explains why.

A Solution for Meeting Regular Expenses

‘Our son Matthew wants to become a doctor and was awarded a place at one of the top medical schools in the country. Medical training costs money however. It can be very difficult to manage the tuition fees and the studying at the same time. Then Bob heard about annuities and in particular the annuity certain which pays out fixed income on a regular basis. We bought one; now neither we nor Matthew have to worry about funding for Matthew’s training.’

The Advantages of Regular Annuity Income

The process was simple enough. Matthew’s medical school provided information on the tuition fees that could be paid in six-month installments. Then Bob and Tamsin bought an annuity of the right size to generate the corresponding income every six months for a total period of four years. The solution appealed to them because:

An annuity certain is provided by a reliable insurance company · Bob and Tamsin knew exactly what the periodic income would be

The annuity certain pays out income to Bob and Tamsin, or in the event of their death, to their estate (to Matthew in this case)

Investing in an annuity certain also has tax advantages

Annuities and All the Things You Can Do with Them

Now that the annuity certain is in place and Matthew has started his training, his parents have some other ideas for annuities as well. ‘It turns out that annuities can be very flexible’, Bob says. ‘Besides fixed term annuities like the one we have now, you can also buy life annuities that help replace income you no longer have when you stop working.’

Future Projects Involving Annuities

Tamsin agrees. ‘While we’re both likely to be working for at least another ten years, we’ll be making annuities a bigger part of our finances and our preparations for retirement.’ Here are some of the ideas Bob and Tamsin have for putting annuities to good use.

Another annuity certain, this time for to pay for phased expenses to redo their garden, redecorate their house and build a carport

A joint life annuity to provide valuable fixed income for as long as they live after reaching retirement age

Having a word with Tamsin’s older sister, Rosemary, who has also been wondering how she should best organise her finances for when she stops working.

‘Tamsin and I are straightforward people’, exclaims Bob as he takes another batch of tasty, fresh loaves out of oven. ‘And that’s what we like about annuities: they’re solid, reliable, good value and simple to put in place.’

If Bob’s and Tamsin’s situation sounds familiar and you’d like to know more about how an annuity could be used to finance your own projects, then call me today toll free at 1.877.842.3863 for a friendly, open discussion free of charge.

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