It’s refreshing to come across positive articles about annuities. While these products are not for everyone, most people get a lot of value from the benefits offered by annuities. Paul Cross recently published this article on Producer’s Web touting the benefits of annuities, “You hate annuities? You’ve got to be kidding.” There have been times that I’ve wanted to say that exact thing, but have held back. I think that those people who hate annuities truly don’t know much about these products, or have only heard of one type of annuity. Safety is the top reason that millions of people buy annuities each month. They also buy them for the benefits of income, growth, and tax deferral. Mr. Cross calls annuities the foundation of your financial plan. If you are looking to accumulate wealth, he recommends the use of annuities. When the markets faltered, annuities and life insurance plans were the only products that remained solid.
We hear a lot of mixed signals regarding what’s going to happen this year with the economy and the financial markets. On one hand, economists predict that the wealthiest people will lose up to 50% of their wealth. But on the other hand, Joe Lieberman predicted that the DOW and S&P 500 will see large increases in value. One thing is certain though; no one actually knows what the future holds. All we can do is guess and forecast what will actually happen in the financial markets. You don’t have to worry too much about that though when you have some of your wealth in premium bonus indexed annuities, according to Mr. Cross. With these annuities, you are able to profit when markets are down, flat, or up.
In an ideal situation, retirement is a time to kick back, relax, and let many of your worries go. If you haven’t secured guaranteed income, that is not an easy thing to do though. With an unstable economy, indexed annuities offer the safety of guaranteed income. Many pension plans are under water, but most people don’t even have pension plans at all. Income needs to be guaranteed by another source. The lifetime income guarantees that come with many annuities cost less than other investments. According to Mr. Cross in his article, a more traditional mix of stocks, bonds, and cash can cost 40% more than using annuities to guarantee your lifetime income. Keep in mind that annuities certainly don’t have to be the only product in your retirement plan. When you use annuities as the foundation of your planning, you know that the foundation is solid. Then you can invest in stocks and other risky investments because you already have safety built into your retirement plan with annuities.
Written by Rachel Summit