Considering the shakiness of the stock market these days, many people who had relied on stock options for their retirement are realizing the secure advantages that are offered through annuities.

People may have invested their savings for years only to see it washed away with the latest economic tide. Annuities, on the other hand, guarantee a continual flow of income that’s less subjected to market changes. Annuities are contracts with insurance companies that usually provide guaranteed income streams. They offer safer options for investors who are worried about the stock market or getting low returns on bonds.

Two types of annuities commonly exist, including an immediate annuity that pays similar to a pension, and a deferred annuity that allows users to invest money that’s tax deferred. Although deferred annuities are dependent on market conditions, they usually have insurance to protect the investor from taking a loss. When you buy annuity, you take a considerably lower risk than investing directly into the stock market.

The one disadvantage until recently is that when you buy annuity, you’d traditionally be stuck with it. You’d face high taxes and stiff penalties if you choose to access it early. Fortunately, recent market and rule changes have created a growing market for selling annuity.

Many consider selling annuity just because they don’t need the payments anymore, or they’d like to take the money in a lump sum and invest it. Being able to put the annuity on the market makes annuities more appealing assets, as they are as good as cash but also a tax-free investment.

Any annuity is salable, except for those held in 401K and IRA accounts. If it turns out you don’t need the entire annuity, you can also sell part of the annuity. The resulting cash can either be used to purchase life insurance or other investments.

Check how the gains will be calculated with the annuity. Also, watch for any hidden penalties for early withdrawals. Older people should also watch out for any rules that might prevent the money from being accessed for several years.

Annuity is a sound investment in the wake of the economic melt down. They enjoy strong demand, yet can easily be sold as a valuable commodity if you need the money in a lump sum for other investments.