We’re hearing a lot of the same advice from financial experts now regarding retirement. Spread your money into different places, especially if you don’t have the traditional pension plans of the past and purchase an annuity for guaranteed lifetime income payments. MSNBC’s recent article by Dan Caplinger of The Motley Fool, “The Best Source for Retirement Income,” gives similar advice. The days of using your pension, social security, and savings as the three tools to get you through retirement have given way to a new time when pensions are rare and the safety of social security is questioned. Annuities, payout funds, and target retirement funds are the top choices of the author to secure retirement income.
The most basic of an annuity is the immediate annuity. You pay a fixed amount of money to receive monthly payments over your lifetime beginning immediately. Moving on from there you have the option to purchase fixed or variable annuities as well as a multitude of different riders and other options offering everything from inflation protection to adding a beneficiary. Fixed annuities are similar to CDs, while variable annuities are more like mutual funds. Since the fees will change with each added benefit, it is important to decide exactly what you need and want for your payment. Since annuities are the best way to fight off the risk of longevity, they are a must for your retirement planning. Using a portion of your savings to purchase an annuity as well as having other investments will set you up for a comfortable retirement.