It can be difficult planning for a future we cannot see. With the many financial products all aimed at fulfilling a financially “easy” retirement, how do we know which options are best? Will there be enough money to continue the same lifestyle or to at least pay the bills? Without a crystal ball, the financial anxiety is real and understandable.
One product in particular isn’t reliant on mere hopes, parlor tricks, or a constantly changing economy: annuities. Annuities aren’t some loose and risky investment or prudish savings account – they are insurance for your retirement gap. Your retirement gap is that awkwardly large space between what you’ll get paid (or have saved) for retirement and what you’ll need to live a secure retirement. Here are 3 ways that annuities cover and close this gap, so that you can rest easy while planning for those seemingly dimly lit golden years:
1) It’s guaranteed.
Most people cannot live on social security alone or even with their pension combined. With annuities, you can rest assured that you will have the money you need to live comfortably through retirement. This legally binding, customizable contract between you and your insurance agency ensures that your premiums, or initial investment, will grow, tax-deferred, over the time allotted in your contract and that payday will arrive.
2) You won’t outlive your annuity.
Your annuity will continue to pay you for life, regardless if you choose immediate or deferred payments. In fact, your annuity can be passed onto a beneficiary, so it can actually outlive you. There are many types of annuities with different levels of risk and costs, so your insurance agent can best personalize this after discussing your situation and goals with you.
3) There are tax incentives.
One of the main advantages of annuities is that they are tax-deferred, meaning you won’t pay income tax on it until you withdraw or begin receiving payments. “This includes dividends, interest and capital gains, all of which may be fully reinvested while they remain in the annuity” (annuity.org). There are complex rules, though, that only your insurance agent or a tax professional should explain, so be sure to ask questions regarding taxes when shopping for the right annuity product.
We all want to know that we will be safe and secure when we are our most vulnerable. Annuities are just the insurance we need to enjoy our senior years doing what we love and not worrying day-to-day about our finances that we worked so hard and long to build and protect. Annuities are the closest sure thing next to having a crystal ball. Call or email your insurance agent today
to see how annuities can build your retirement to cover your needs and make your golden years a whole lot brighter and easier to see.