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An Immediate Annuity Protects Your Tomorrow

By choosing an immediate annuity at the beginning of your retirement, you ensure that all of your tomorrows are protected.  In the Business Day article, “With annuity, you can decide tomorrow’s income stream today,” Modestus Anaesoronye says that there are some things to take into consideration before choosing your immediate annuity.  Two of the most important things to consider for your immediate annuity are the safety of the insurance company carrying your guarantee and the price, or how much monthly income you will receive.  While most states guarantee some amount of your annuities if the insurance company becomes insolvent, it is best to find a strong company with good ratings.  Make a monthly budget in retirement to determine how much you will need to receive from your annuity to cover expenses not covered by social security or other income you’ll receive.

The article offers five things to consider when you are looking for an annuity.  The first is to shop around because even the best-rated companies compete with each other and offer deals from time to time that make their immediate fixed annuities better than someone else’s.  Don’t take a risk with your annuity purchases.  They should be the safest part of your investment strategy; use stocks for your riskier investments.  It’s not a bad idea to diversify and buy a few annuities from different insurers to get added benefits and safety.  Keep your annuity purchases simple.  If you want to add death benefits or inflation adjustment that is great, but don’t add a bunch of riders that you really don’t need.  Make sure that you know the commissions you’ll be paying up front and in detail.  Any commissions paid come out of your monthly income, so make sure they are fair and transparent.  An immediate annuity is a great product to finance your retirement, so do some research and protect your tomorrows.

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