If the fear of outliving your retirement savings haunts you, then looking into income sources that can keep going as long as you do may not be such a bad idea. One way to potentially alleviate this financial anxiety is to consider an annuity as a part of your retirement plan.

Misinformation about annuities has abounded for years, but in truth, annuities can help diversify retirement portfolios and are one of the few financial solutions that address guaranteed income for life.

Myth #1: Annuities are for retirees only

Truth: Annuities can help many people who are still working and trying to save for their retirement. If your employer-matched savings plans and IRA contributions are maxed out, deferred annuities can be a tax-efficient savings vehicle that can turn into income later.

Myth #2: Annuities are expensive

Truth: Some can be. However, many modern annuities are competitively priced and don’t charge a maintenance or annual fee. Be aware that optional riders can provide additional benefits which may come with an annual charge.

Myth #3: Annuities won’t supplement retirement income

Truth: Various payout options can provide a steady stream of income throughout your retirement years. Additionally, for an additional fee, income riders can help grow your income base for more guaranteed income.

Myth #4: Annuities are too complex

Truth: Annuities can vary in complexity, but some types, like fixed annuities, offer more easy-to-understand options. Working with a financial advisor can help you navigate the choices and find the best fit for your financial goals and situation.

Myth #5: Annuities are not regulated

Truth: Annuities are regulated by state insurance departments, and insurance companies offering annuities must meet strict financial requirements and adhere to regulations to protect consumers.

If you would like to learn more about the benefits of annuities, feel free to reach out to our office for a free retirement planning strategy session. We will be happy to educate and advise on the various options so you can decide if an annuity is a good fit for your overall financial plan.

Sources:

[1] https://www.fidelity.com/viewpoints/retirement/facts-about-annuities 

This document is for educational purposes only and should not be construed as legal or tax advice. One should consult a legal or tax professional regarding their own personal situation. Any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products offered by an insurance company. They do not refer in any way to securities or investment advisory products. Insurance policy applications are vetted through an underwriting process set forth by the issuing insurance company. Some applications may not be accepted based upon adverse underwriting results.  Death benefit payouts are based upon the claims paying ability of the issuing insurance company.