To me, a happy retirement starts with a stable source of income. With that comes the peace of mind to pursue your interests and hobbies and not worry over the whims of the market. Cover your downside and costs of living, and enjoy life for a change….
So how to generate that stable retirement income? Variable Annuities make up over 60% of annual annuity sales, but I don’t know why most people buy them. I also just don’t see why the carriers even bother to issue insurance guarantees in a vehicle that could lose principal value, and where they don’t control the investment choices. It’s no wonder the fees are so high! The fundamental premise is flawed-
But there are a lot of better options. For starters, fixed annuities offer the safest way to grow your money, but at a modest rate. It’s better than a CD however.
Another option is index annuities which are a much lower cost way to grow your asset base with an insurance component. These are great retirement saving and investment vehicles.
For retirees at a later age, immediate annuities have the distinct advantage of offering the highest payout of any. But they come with the disadvantage of not flexibility or asset value once issued.
A recent and exciting addition to the landscape is Secondary Market Annuities- these are structured settlements being sold by individuals at a discount. Much like a fixed annuity, they have defined payments and terms, and come at effective yields far higher than any comparably safe investment.
Fundamentally, annuities are the perfect vehicle to build a guaranteed floor of income in retirement- safety is the #1 reason why people should buy an annuity. It’s insurance for your money and your income. Properly structured, there is no higher probability of success strategy for retirement income than one using annuities. This is borne out by countless studies and economic research, pioneered by the Wharton School of Business.
1) Determine your needs
2) Lock in guaranteed income to cover the guaranteed living costs
3) Save the rest of your portfolio to counter inflation, to grow, and to be more flexible.
For the majority of savers and investors, annuities are critical to retirement safety and unfortunately, mainstream media has done a pretty good job casting the entire industry in a bad light, mostly due to variable annuities.
But don’t let poor sales practices and a fundamentally flawed product skew your search. Safe retirement income is critical. You can learn more about safe retirement income options at my site, AnnuityAce.com