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Annuities as an Effective Means to Retirement

In the Raleigh Personal Finance Examiner, Robert Stack wrote that “Annuities are a useful tool.”  He points out that clients are often wary of annuities because of common misconceptions, but that they are important for many reasons.  Annuities are one of the most secure ways to receive money because they are guaranteed for life.  Lottery winnings, social security payments, and contracts with life insurance companies are all annuities.  Annuities are very important to consider when putting together your “Financial Plan.”  Stack notes that while annuities may not be the best vehicle for everyone, they should always be considered.

Variable annuities seek to guarantee your money while potentially growing it in the market.  Fixed annuities have less risk associated which makes some investors happy.  Stack worries that many people don’t consider annuities because their advisors are not clear on all the details or how important they can be to a retirement plan.  He points out that last year when many people’s investments were decimated by the market, he didn’t lose any money in his annuities.  That seems to be a convincing argument to at least compare annuities and see if they are right for you.

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