According to Steve Vernon’s article, “Planning Your Retirement: The Best Investments to Generate Income” on CBS Money Watch, there are three good choices when it comes to generating retirement income. He is quick to point out that the same solutions do not work for everyone, but each person has to consider the same questions to determine which investments will work for them. Figure out the right mix of investments for your situation then choose specific investments and services. Immediate annuities are one of the methods suggested by the author for generating retirement income. His other options are investing all of your retirement savings and living off of the interest and dividends or investing your savings and withdrawing the money very cautiously.
Once you make the decision to go with immediate annuities to generate your retirement income, you have three options from which to choose. If you go with a fixed immediate annuity or an immediate annuity that is inflation-indexed, your immediate annuity rates are set and you’ll know your payout for the future. In contrast, if you choose a variable immediate annuity, your payouts will change depending on your individual stock and bond portfolio. With a variable annuity, you get the potential for higher gains along with an underlying risk if the markets take a downturn. Make sure to look at a number of variable annuity reviews to determine which portfolio you think is best for you. The author suggests researching any investment for at least a week to make sure you are aware of all the fees, positives and downsides. Since it will be financing your retirement, it is worth the time it will take you to research.