Are Annuities for Me?

As you sit back and look at your finances, are you considering adding annuities to your portfolio?

In the event you are trying to save money, a deferred annuity could be the direction you want to go.

Among the advantages of deferred annuities is the fact that they help assist you in reaching your retirement goals.

Employer-sponsored plans like a 401 (k), 403 (b) or Keogh are an important component in planning for retirement. Contributions to these plans and to IRAs are limited, and they might not add up to the retirement income you require. This is especially true if you began saving for retirement late or had contributions interrupted. It is also important that the purchasing power for defined-benefit pension income is eaten away due to inflation.

Another advantage with a deferred annuity is that it helps you give variety to your investment portfolio.

Experts will tell you that in order to get the best return for a given level of risk, it is important to diversify investments throughout a number of asset classes.

Fixed annuities will provide a unique asset class, being an investment that is guaranteed not to decline and that will actually grow at a specified interest rate. The guarantees are backed by the claims-paying ability of the insurance company.

Another tip from experts is that deferred annuities assist you in managing your investment portfolio.

If needed, you can rebalance your portfolio to the original formulation, whereby you shift funds from the classes that have increased the fastest to the ones that have increased at a slower rate.

When it comes to immediate annuities, they can help you several ways, including protecting you against the chance of outliving your assets.

Social security will pay retirement income as long as you are alive, as will a defined-benefit pension plan. The only other option for income that goes on indefinitely will be an immediate annuity.

An immediate annuity also comes in handy in order to protect your assets from getting into the hands of creditors.

Typically the most that creditors will be able to access is the payments from an immediate annuity as they’re made, due to the fact the money you provided the insurer now belongs to the company.

It is important to note that some state statutes and court decisions also provide protection for some or all of the payments from those annuities.

Annuities can be a great asset working on your side, so consulting with an experienced consultant is always recommended.