Annuities Investment and Retirement Planning: Securing Your Financial Future

When it comes to retirement planning, you can hardly afford to make mistakes. Imagine yourself, 20 years into your retirement, assessing your portfolio and realizing that it has dwindled down to almost nothing. You are still in good health, but the only income you can expect from this point forward is a paltry pension or Social Security check once a month--if you are lucky.

Living for so long after retiring should be a cause for celebration, not concern. When one outlives his or her wealth, however, a concern is precisely what these extra years become. Even if you have a good idea of what your monthly and annual living costs will be once you retire, how can you know how much money to save if there is no way of knowing for how long you will live?

Thankfully, there is another financial instrument through which you can guarantee a steady monthly income during retirement--no matter how long you live. In a series that will be featured regularly on our blog, we will delve into the subject of annuities, helping you learn the ins and outs of this underrated and underutilized life insurance tool. Today, we will define annuities and briefly explain how annuities investment can help you enjoy financial security throughout your retirement years.

What are Annuities?

In short, annuities are long-term investments that help shrewd investors meet their financial needs during retirement. Unlike stocks, bonds, and mutual funds, from which investors can withdraw money as needed until an account is emptied, annuities pay out on an as-specified regular basis for a pre-determined period of time or for the lifetime of the investor. Individuals who are planning for their retirement and are concerned about outliving their wealth should strongly consider annuities that pay out for life.

How Can Investing in Annuities Enhance My Retirement Years?

By providing you with a regular, fixed or variable (based on your preference) income, annuities investment can beef up your monthly, quarterly, and annual income. This is money you can count on, particularly when we are talking about fixed annuities. Even when the markets are in poor shape and the rest of your portfolio seems to be sinking, you can count on your annuities payments to help keep you afloat financially.

Annuities come in many different forms, the idiosyncrasies of which you can read about and get to know in future posts. For now, make a note to consider annuities investment as part of a broader retirement investment portfolio and speak with your life insurance broker or retirement planning specialist the next time you sit down to discuss your investment portfolio. If you are a life insurance broker or annuities sales associate who is looking to better sell annuities to your clients, call Brokers Alliance® at (800) 290-7226. We have the experience, tools, and connections to help you help your clients realize that annuities are for them.

Would you rather your retirement portfolio consist of safe financial instruments like annuities that generate a relatively predictable income or riskier instruments like stocks that have the potential to generate major payoffs but also have the potential to decline sharply in value?