Annuities

Building wealth with tax advantages and a customized portfolio is what you do with an annuity. A good combination.

Building wealth with annuities: your guide to a comfortable future

Facing the future with peace of mind: that's what we all want. And an annuity brings you a lot closer to that dream. In this article, we discuss all aspects of annuities so you can make an informed choice about your financial future.

What is annuity?

Simply put, annuities are a way to build wealth with tax advantages. You periodically deposit money into an annuity pot, and you can deduct that deposit from your tax return. Later, when you retire, you receive the accumulated pot back in installments. You then pay tax on those payments, but usually at a lower rate than in your working life.

The benefits of annuities:

  • Tax benefit: The deposit is tax deductible, so you pay less tax now.
  • Return: Your money can grow in the annuity pot through investments.
  • Freedom of choice: You can choose how long you want to save for and when you want the benefits to start.
  • Spreading risk: You can spread your wealth across different asset classes.
  • Survivor's pension: You can arrange a survivor's pension through the annuity.

The disadvantages of annuities:

  • Deposits are blocked: You cannot withdraw the money in the annuity pot in the interim.
  • Penalty interest: If you do withdraw money, you usually pay penalty interest.
  • Investment loss risk: The value of your annuity pot may decrease due to investments.
  • Benefits are taxed: You pay taxes on the benefits later.

What types of annuities are there?

There are two main types of annuities:

  • Savings Annuity: You deposit a fixed amount periodically and your money grows through interest.
  • Investment annuity: You deposit an amount periodically and your money can grow through investments.

Within those two main types, there are still several variants, each with its own advantages and disadvantages.

How do you choose the right annuity?

There are a number of factors to consider when choosing an annuity:

  • Your risk profile: How much risk are you willing to take with your investments?
  • Your investment horizon: How long do you want to save?
  • Your desired benefits: How much money do you want to receive per month?
  • The cost: What is the cost of the annuity?

Tips for building wealth with annuities:

  • Start on time: The earlier you start saving, the more time your money has to grow.
  • Deposit a fixed amount periodically: This way you build up assets gradually.
  • Choose an annuity that fits your risk profile: Don't take on more risk than you can bear.
  • Take advantage of tax benefits: The deposit is tax deductible.
  • Determine your desired benefits: How much money do you want to receive per month?
  • Compare different providers: There are several providers of annuities, so compare terms and conditions before making your choice.

Annuities are an attractive way to build wealth with tax advantages. There are different types of annuities, so there is always a variant that suits your needs and wishes. Start on time, deposit a fixed amount periodically and choose an annuity that fits your risk profile. That way you will be on your way to a comfortable future!

save

The saver is someone who chooses security over returns. Low risk resulting in very low returns. The main goal is capital preservation and having money readily available for unforeseen expenses.

defensive

Defensive investors are cautious and want to minimize risk. They invest mainly in bonds and safe mutual funds. Returns are moderate, but preserving capital is the top priority.

moderately defensive

These investors seek a balance between return and risk. They invest in a mix of bonds, stocks and real estate. Although there may be some volatility, they aim for stable long-term growth.

moderate offensive

Moderately offensive investors accept some risk for potentially higher returns. They invest primarily in stocks and diversify their portfolio to spread risk.

offensive

Offensive investors have a higher risk tolerance level and invest primarily in stocks. They seek significant long-term growth and accept temporary market volatility.

highly offensive

Willing to accept significant fluctuations. They invest in stocks, often with a specific focus, derivatives and volatile sectors for maximum growth, with significant short-term fluctuations.

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