According to Henry Steelman’s Annuity News Journal article, “Annuities Generate Retirement Income,” annuities are a great investment to carry you through retirement. Running out of your cash flow seems to be the biggest worry for those approaching and in retirement. Since most annuities pay you monthly income over your entire lifetime, they can be better investments than some 401k’s and IRA’s. Many people transfer to 401k annuities upon retirement because using your 401k money to purchase a lifetime annuity will ensure guaranteed income to last your entire life. Another advantage that annuities have over these plans is that they rarely have a limit for annual contributions. You can always find a good annuity without a contribution limit, while you can’t always find that with other investments.
If you still have a few years left before retirement, you can purchase a deferred annuity and your payments will begin at a later date. You can even continue to make contributions to some annuities and your money will grow depending on your annuity rates. Any money that you earn in your annuity is tax-deferred, another benefit to using annuities over other retirement products. If you need the money right away because you are retiring soon or already have, you would purchase an immediate annuity. The best immediate annuities are tailored to your life goals and how you want to spend your money. The author says that all annuities do a good job generating retirement income, so you just need to find the product that is best for you. Since it is difficult to take your money out after purchasing an annuity, you want to make sure that you plan to use the annuity to generate income for the rest of your life.