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Fixed Annuity Guarantees Are One Piece of Retirement Planning Puzzle


In a recent Insurance News Net exclusive, Rich Lane discussed “Flipping The Switch On An Annuity Income Stream.” He said that annuities are the only investment type that can provide you with the security of a guaranteed lifetime income stream. Retirement planning can be frightening for many people, so it is important to focus on your specific goals. For most of us the main goal is to be financially secure later in life, such as after retirement. A lot of people are looking for a more conservative approach to retirement investing after almost a decade of market uncertainty. A balanced portfolio is the best way to secure a comfortable retirement. Often, creating an income stream with an annuity product is an important piece of the retirement planning puzzle. Fixed annuities work well as a puzzle piece because they guarantee an income stream for your future regardless of what happens in the markets. Another benefit is that the income stream is flexible, so you can turn it on when you need it if your annuity is deferred.

You have to make an important decision after determining that a fixed annuity income stream is the right piece for your retirement planning puzzle. Fixed annuities can be either immediate or deferred. You have to make sure that you have enough money to last for as long as you live and that you have money for health related or other emergencies in retirement. What type of fixed annuity you purchase will be based on your individual situation. An immediate annuity starts paying you income right after you buy it, so this type of annuity is right for someone who needs an income stream right away. If you have other forms of income that can carry you through for awhile, like a paycheck, Social Security, pension or 401k funds, then a deferred annuity is probably best for you. The guaranteed returns and income from a fixed annuity are unrivaled whether your annuity is immediate or deferred.

If you decide to go with a deferred fixed annuity product, you will determine at what point you flip the switch and start receiving your income payments. Your income stream can either last for the rest of your life or for a specific time frame if you are using it to reach a certain point in life where you will then have other income coming in. Lifetime income payments will continue coming in even if you live to well over 100. It’s hard for many people to go from their saving years to their spending years, but the time comes for all of us when work ends and we need to start using those savings to pay bills. It’s wise to work with an expert to help you determine the right time to turn on your annuity income stream with a deferred fixed annuity. Fixed annuity products with their guaranteed income streams are often a important piece of the puzzle that is retirement planning.

Written by Rachel Summit

Follow Rachel, aka Finance Mama, on Twitter and Google+

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