ANNUITIES – Why this Might be Good for Your Portfolio

ANNUITIES – Why this Might be Good for Your Portfolio

June 01, 2022
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According to Annuity.org, there are multiple reasons Americans are investing billions into annuities. 

There’s much talk around annuities regarding retirement planning, which leaves the conversation open to a lot of questions and potential misunderstandings. Be prepared that selecting to have an annuity in your portfolio should only happen after an informed discussion with your financial or insurance professional. 

Ever wonder why so many Americans have purchased annuities? Check these four reasons:

  • Guaranteed Income for Life – When you purchase an annuity, you can set up part of your retirement savings as a stream of payments that are guaranteed by the insurance company that issues it. Receiving this income for the remainder of your lifetime ensures you don’t outlive your money.
  • Tax-Deferred Growth – We’re pretty sure that no one likes paying taxes, but we all have to do it at some point. With an annuity your money grows tax-free until you withdrawal it, including any investments, dividends and interest. So even though you have to pay the tax, you're growing your nest egg simultaneously.
  • Long-Term Care (LTC) Benefits – There could be a time in your future when LTC services are needed, and it’s no surprise that these costs can go beyond what you had planned. If you invested in an annuity with an optional rider, you might be able to use the income for long-term care coverage or transfer money from your annuity to a LTC policy’s premium.
  • Immediate Income Options – Investing for the long-term doesn’t always work, so this is where a single premium income annuity (SPIA) provides a more timely payout since they're annuitized almost immediately. Income annuities are intended to provide guaranteed income, not help you accumulate retirement savings, so talk through your options before making your selection.

If you search online, you'll discover a plethora of opinions and frequently asked questions regarding annuities. This is a good indicator that choosing this investment option shouldn’t be done without due diligence and at the guidance of a knowledgeable financial or insurance professional.

Creating a retirement strategy takes work and is probably best done with the help of an industry expert – be it a financial professional or a licensed insurance agent. If you’re interested in annuities, call us and we’ll help guide you in the right direction.

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This document is for educational purposes only and should not be construed as legal or tax advice. One should consult a legal or tax professional regarding their own personal situation. Any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products offered by an insurance company. They do not refer in any way to securities or investment advisory products Insurance policy applications are vetted through an underwriting process set forth by the issuing insurance company. Some applications may not be accepted based upon adverse underwriting results.  Death benefit payouts are based upon the claims paying ability of the issuing insurance company. The firm providing this document is not affiliated with the Social Security Administration or any other government entity.

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1https://www.annuity.org/annuities/buy/reasons-to-buy/

2https://www.annuityresources.org/bestannuities/?gclid=CjwKCAjw682TBhATEiwA9crl3y4V-khvJUYU8iBGT6SGGzekmAaVwzkBG2AQBL-HD4TCUXTHqLQeKRoCyVAQAvD_BwE