Financial Security Through Annuities
People often think financial security is only investments and savings, but that’s only part of it. “Financial security is about safeguarding what you’ve already achieved – home, property and income – while at the same time saving and investing for your family’s future.
The largest unknown, is whether an investment portfolio, will grow or decrease in retirement.
Recent retirees who thought they had enough were suddenly in trouble when the market tumbled last year.
The nice thing about a fixed annuity is its there as long as you are. There are many investments that are only good for so many years and if you outlive them you take the loss.
With advances in medicine, life-spans are increasing and one of the main reasons is preventative medicine and prescription drugs. The average senior citizen spends 15-20% of their monthly income on prescription medicines. Because of the longevity exposure, there is a significant and growing probability of retirees living to age 90, 95, or 100 or more.
Lawmakers, policymakers, academics and industry executives are now saying adding annuities as an investment option is one way of helping retirees make sure they don’t outlive their nest egg.
Why? Annuities can provide a lifetime steam of income that cannot be outlived. In addition, life expectancy for annuitants has proven to be higher than those who are not annuitants. First, they have peace of mind that they will not outlive their income provided by their annuities.
Secondly, annuitants are healthier than the general population, because annuities are generally purchased by individuals with above-average health, and who figure they will gain the most advantage from an annuity purchase.
Thirdly, annuities have riders that can help ensure that the unknown longevity can be insured by guaranteed planned income provided by their annuities. One rider offered by certain annuities is increasing your lifetime income benefit, should you require long-term care.
In planning your retirement you can provide for long-term care insurance protection if you select a rider that provides for increased income should you satisfy the requirements of the benefit trigger.
A stand alone long-term care policy can be expensive the older you are, as they are priced similar to life insurance. The older you are, the more costly the premium. If you are interested tin a LTC benefit, the cost may be much less expensive as the rider cost is not age-sensitive.
A annuity is an excellent option for creating a steady stream of payments you’ll want when you retire. In a nutshell you’re giving yourself a regular paycheck. You don’t want to depend on an annuity only for your retirement income but it’s a nice addition to your retirement portfolio. It’s always an excellent idea to have more than one source of income when you retire.
