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Annuities are definitely an option for the retired but whether they are the best options or not are yet to be decided. The market scenario has come up with a plethora of possibilities. Retirement annuities are only one of the lot. It is like taking a drop of water out of the vast sea. Therefore to decide for the best option available one must be very up to date with the market information. The individual in concern must spread the net for the best fish.

Annuities in general have a beneficial effect however to go for it one needs to know both the pros and cons of this scheme. To begin with the merits or pros annuities are it provides a buffer against the market fluctuations. That is it helps in shielding the invested amount against inflation that may be affecting the market in general. It not only safeguards the amount from market fluctuations but also provides a protection to the principal amount. This implies that the initial amount invested by the individual in concern remains intact if not anything else. This ensures the individual investor that the amount received will be either equal to or greater than the invested amount. It will not stoop to a level below the invested amount.

The other benefits are getting an exemption from the tax and of course the very obvious benefit of annuities that is of providing a lifetime earning. Now that the merits have been dealt with one also needs to know the demerits of annuities. The cons though not many are still there. They are firstly this scheme is inflexible to a certain extent, as in the amount once invested in this scheme stays fixed there. This restricts the individual's access to that sum of money. Secondly, all the different forms of this scheme do not provide equal amount of earning for the investor. Finally this scheme though a safer option, restricts the annuitant from investing in more speculative and monetarily rewarding openings like that of stocks.

The retirement annuities too have their own list of merits and demerits. This form of annuities include in pros the following points. Firstly, there is no limitation as far as the amount of investment is concerned, one is assured of lifetime income, moreover the restrictions on income can be overcome. This scheme allows to shift investments without any liabilities pertaining to taxes. It also buffers the investment from market fluctuations.

Owing to the fact that both the aspects are being taken into account about retirement annuities the cons of this scheme also comes to the forefront. When it comes to penalties, extra fees and commissions one can expect high cost. This is a long-term investment, so one needs to invest first and keep patience until it matures. The withdrawal involved will not be easy and one might have to pay penalties as well. Taking all these aspects into account one must prudently compare, judge and then decide what to opt for, and whether annuities will be the perfect answer to one's problems.