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fixed annuities

Are Fixed Annuities a Key To Your Financial Future?

Categories: Fixed Annuities

With the future of pensions up in the air, Social Security on thin ice and 401(k) fees causing concern, more and more people are turning to other types of financial products to secure their retirement.  What is another option? Fixed Annuities.  Unlike other retirement savings vehicles, fixed annuities are issued by insurance companies and are known for their safety and flexibility, which is lacking in many other products.  Every individuals retirement plan needs are different, but here are a few good reasons why you should be giving annuities a second look.

  • Flexibility – As mentioned, Annuities offer more flexibility than most other retirement funding products.  In your career, you went to work every day and earned money.  In your retirement, it may seem like you wake up every day and simply spend money.  Vacations, family gatherings, shopping trips, etc.  It’s important to ensure that you have sufficient money coming in to cover those expenses.
  • Lifetime Payments – With life expectancy rates climbing every year, one of the biggest risks of retirement planning is longevity, or outliving your money.  Many types of retirement funds can leave holders worried whether the income will last them for their entire lives. Annuities can be structured to provide guaranteed monthly income for as long as you live.
  • Avoiding Risk – Everyone saw the devastating effect a market downturn can have on the investment portfolios of recent and soon-to-be retirees.  It can be a scary thought for anyone approaching that age.  Fixed Annuities, with all their options and flexibility, offer security from these market effects, while also providing interest rates that are typically better than can be found with money market funds or bank CDs.

With all the advantages of annuities, some people might be tempted to make a quick purchase decision, but there are certainly other things to consider before making any moves.  Because of the many options and vast assortment of fixed annuity product offerings, they can be confusing and technical in terms of their features.  Before you put your name on the dotted line, make sure A) you have an advisor you can trust and B) you get all of your questions answered.

With all the changes occurring in the retirement plan marketplace and what seems to be a difficult time ahead for traditional pension plans and social security, annuities are becoming an attractive and viable option for most retirees.  Even if people aren’t ready to abandon the more traditional offers, annuities can provide a comforting supplemental income.  Take the time to look at the options available with fixed annuities and see if they could benefit you.  It could pay off later.