When it comes to employee benefits, Orlando businesses have an overabundance of options. A strong employee benefits plan can help Orlando employers successfully recruit and retain strong candidate and workers but understanding all the different options can be tricky. Annuities, for example, are a commonly confounding employee benefits option for both employers and employees. Here is a quick explanation for you and your employees of what annuities are and how they work.
What are annuities?
Essentially, an annuity is an agreement between an individual and an insurance provider that guarantees that insurer will provide a specified return on the insured’s original investment. Annuities are appealing to many employees because there is a guaranteed return on their principal, ensuring that the employees will make money in the long run. This means that annuities can be successfully used as part of a retirement strategy. Annuities are a popular choice for employees who want to receive a steady income stream throughout their retirement because the income received from an annuity can be paid-out monthly, quarterly, annually or even in a lump sum payment.
There are several different types of annuities. For example, fixed annuities offer a guaranteed return that will grow, even as taxes are deferred. On the other hand, an indexed annuity does not have a guaranteed interest rate thus there is no guaranteed return rate. This means that if the market in which these funds were invested does well, investors could earn a better return with an indexed annuity than they would with a fixed annuity, however, if the market falters the revers applies as well.
At Newman Crane we can help you design an Orlando Employee Benefits plan that will help your company acquire and retain the most talented and dedicated employees. Your Benefits plan will be as comprehensive as you wish, custom designed for your organization’s needs and budget. Call one of our business coverage specialists at (407) 859-3691.