5 Advantages to Annuities: Optimizing your Retirement Finances

Annuities offer some considerable benefits over other kinds of retirement investments, especially for those not able or willing to risk losing a portion of their retirement savings.

Here’s the big advantages to going the annuity route:

  • Lifetime Income – With an immediate lifetime annuity contract, you are guaranteed periodic payments for as long as you live. The “risk” of you living a long and happy life is borne by the insurance company providing the annuity.

Social Security and pensions offer a similar form of retirement income protection – but only up to a certain amount. The only limit to the size of your annuity payment is the budget you have now. Furthermore, the older you are, the larger your monthly payments will be for the same price.

  • Inflation Protection – You can customize annuities to ensure that your monthly paycheck will keep pace with the cost of living. This is critically important because inflation can have a devastating effect on your assets. The downside of an add-on like inflation protection is that it will cost more – in an initial cost or in lower starting payments to begin with.
  • Principal Protection – One of the best features of fixed and equity indexed annuities is that the value of the annuity can be guaranteed to be at or above the amount invested. You can guarantee that you (or your heirs) will receive back at least as much money as you invested in the annuity.
  • Tax Efficiency – The purchase of an annuity with qualified retirement savings (401k or IRA funds) can save you money on taxes over taking a lump sum payment. You can roll-over qualified funds into a qualified annuity without any tax penalties. You only pay taxes on the income the annuity provides.
  • Predictability: Having predicable retirement income (presumably adequate income to cover all of your expenses) can help you feel happier.  Lifetime annuities provide that kind predictability. By contrast, retirees and senior citizens who must withdraw money from investments to cover their expenses had the highest financial stress.

An annuity is a great way to protect your quality of life during retirement. Your retirement assets can be efficiently used to purchase guaranteed income to last as long as you need. Best of all, this income can be protected from inflation and other financial woes.

Are you ready for a free consultation regarding your retirement planning? My Senior Health Plan’s team of financial advisors can assess your situation and help you develop the right retirement solution for you. Call 1-877-255-6273 to speak with a live agent who can assist you in optimizing your plan.