Annuities are one of the most popular investment products available today. One reason annuities are attractive is that they can help build more value over time. By providing potential growth that is tax deferred, an annuity’s investment earnings can accumulate and compound untouched by federal, state, or local income taxes until you begin making withdrawals, which is usually after retirement.

Features of annuities include:

1. You can make a single contribution or a series of payments over time.
2. You can contribute any amount, regardless of your income level or sources of income.
3. When you begin making withdrawals, you can choose from different payout methods, including a fixed amount for life for you and/or your spouse, or payments to your beneficiaries or heirs.
4. Payout methods include insurance features, which guarantee payment to your designated beneficiaries if you die before withdrawals begin. In most cases this payment does not have to pass through probate.

How can you maximize the value of an annuity? Here are 6 simple steps:

1. Taking advantage of low fees.
2. Choosing an annuity that offers a variety of investment options.
3. Dollar cost averaging could potentially boost long-term returns.
4. Increasing the potential return on aggressive investments.
5. Enjoying the benefits of diversification.
6. Using annuities to pass money along to heirs quickly.