With fixed annuities, the insurance company, rather than you as the contract owner, assumes the risk involved if you outlive your annuity's value. When you retire, they can offer you stable income for life that is consistent, reliable and guaranteed. Fixed annuities earn a guaranteed minimum interest rate on your contributions.There are two main types of annuities-"fixed" and "variable": Other than pensions, they are the only retirement products that can provide you with income for life. ![]() They may be available in your workplace savings plan or individual retirement account, or individually. Annuity basicsĪnnuities provide you with the opportunity to increase your savings while you're working-and the security of income after you retire. In the meantime, you can use withdrawals from your investment portfolio to pay for unexpected expenses as they arise-or to travel, indulge your family, or pursue other passions in retirement. ![]() You can always convert more of your savings into lifetime income later if the need arises. If there's a gap, consider using a portion of your savings to fill it with payments from an annuity. If you want your guaranteed income to cover 100% of those expenses, calculate how much you expect to get from Social Security and other sources. You can use a budget worksheet Opens pdf in new window to estimate what expenses like food, housing and healthcare may cost you in retirement. How big does your income floor need to be? Everyone's situation is different. That way, you have more potential to meet your needs down the road-or leave a legacy for your family. Having a reliable income stream you can't outlive not only provides you with financial security in retirement, but it also gives you greater flexibility in how you invest the rest of your portfolio. They can help bridge gaps in the income Opens in a new window you need to cover everyday expenses.
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