Despite the fact that annuities are the best way to finance your retirement if you don’t have a large pension from your job, which most of us don’t anymore, preconceived notions about annuities still keep many retirees from using them. Time magazine’s Dan Kadlec gives us some annuity insight in his article “Why Annuities are the Answer: But Such a Tough Sell.” More than half of the elderly population suffers from some form of memory loss, many with full blown dementia. This is not the time when they need to be figuring out what investments their money should be in or transferring funds around. The guaranteed lifetime income payments they would receive monthly from an immediate annuity would cover any concern about getting monthly retirement income.
Unfortunately, close to 70% of those recently surveyed said that they want to keep control of their assets in retirement. Now, the survey also found that 3/4 of retirees wish that they had locked up some form of guaranteed income at retirement and more than that wish their employer had helped them find this guaranteed income stream. What those surveyed don’t seem to realize is that you can’t get a guaranteed stream of retirement income without giving up control of some of your assets to an insurance company.
Insurance companies and even the federal government have been working hard to help Americans understand the importance of using annuity products in their retirement planning. Some of the things that have been holding retirees back include misconceptions, while others are valid concerns that just don’t apply to all annuities. Low interest rates makes annuity rates less attractive than they have been in the past, but they still offer value and retirement security. Some annuity products are hard to understand and some have high fees, but this is why we recommend speaking with an annuity expert before making any purchases. Americans need to view annuities as a good type of insurance that you actually use when something goes right rather than wrong. You are protecting yourself in case you live a really long life, with an annuity you won’t run out of money. Even though you give up control of the assets you use to purchase an annuity, the security you get in return is invaluable.
Written by Rachel Summit
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