Annuities for Regular Income?
Do you sometimes have trouble with money management? Do you often worry that your regular income isn’t enough to support yourself?
If so, an annuity might help you out.
If you aren’t great with money, an annuity seems very confusing. There are a lot of misconceptions or simply lapses in knowledge that can make understanding annuities very difficult.
Because if this, it can be very hard to figure out whether or not you should purchase an annuity, and whether something like that is the right step for you to take in your financial plan.
Have you had these doubts? If so, you aren’t alone. It’s been found that while 84% of retirees want annuities, only 14% actually buy them.
A lot of this hesitation probably stems from a lack of knowledge, which is understandable. You don’t want to pick something that you don’t understand, especially when it comes to your finances.
Luckily, we’re here to help. Here’s everything you need to know about annuities, and whether or not you should consider them for your regular income.
How Do Annuities Work?
Basically, annuities are for people who are worried about outliving their income.
It works fairly simply. With a DIA (Deferred Immediate Annuity), you buy payments, which are then converted into payments that last for the rest of your life.
There are some annuities that are variable. These can pay out more but are also at a higher chance of risk because you’re investing in mutual funds.
Then there are fixed annuities, which are much less risky but also may not see as much profit.
Annuities are often very personal and specific. We’re here to advise and educate you, based on your unique needs and goals, which annuity will help you reach your ideal financial future.
Things that you should consider when looking to purchase an annuity are your income needs, risk tolerance, and investment objectives. These are all factors that will go into deciding whether or not you wind up using a fixed index or a variable annuity. But some people have more questions when it comes to annuities. Even after learning how they work, some doubts linger.
Is an annuity right for me? What’s the catch?
It’s easy to worry that you aren’t understanding the true risks and rewards of an annuity. That’s why we’re breaking it down a bit further.
What Are The Pros And Cons Of An Annuity?
Like any investment option, annuities come with both pros and cons.
Here are some of the benefits of annuities:
- You never have to worry about running out of money after you retire.
- Many annuities keep pace with inflation.
- It’s less work at an age where you probably don’t want to be doing that sort of thing.
But, of course, there are some cons when it comes to annuities, as well. Here are some things you should watch out for when purchasing annuities:
- Not all annuities are created equal. You have to make sure that you’re getting yours from a reputable source.
- If you pass away before you get your money’s worth, money that could have gone to your heirs will stay with the annuity company. This is only true if you annuitize your annuity. If you purchase an income rider, your beneficiary will get the account value that’s left in your annuity at the time of your passing.
Like any financial plan, there are some risks involved when it comes to annuities. Knowledge is power and there are a lot of professionals who will keep you from learning so that the sale is easier for them. Ask us. We offer free consultations, so if you have any worries about the risks, we would love to talk with you about them and set your mind at ease.
How Do I Know If An Annuity Is Right For Me?
There are a few things you should consider if you’re thinking about getting an annuity. The first step is to ask why you want an annuity. You should only get it if you think you can really benefit from it. Are you struggling? Worried? Unsure about running out of money during retirement?
These are great reasons to invest in an annuity. Outside of that, though, there are some other factors to take into account. Annuities aren’t for everyone, after all. Financial plans should be unique to your situation. There’s a specific situation that annuities work for, so you need to think carefully.
For example, just how much are you able to dedicate to an annuity? Once you pay for it, there’s no getting that money back, so you have to be very careful. Put too much of your regular income into it, and you’ll wind up struggling. Your age and health are also things to consider. You want to make sure that you’ll live long enough to get the benefit of the annuity. But if you have the money to put away and are in relatively good health, a Fixed Index Annuity might be the perfect step for you to take.
How Do I Get An Annuity For Regular Income?
Now that you’ve carefully considered annuities, their risks and rewards, and whether or not they’re right for your regular income, it’s time to take the next step.
Earlier, we said we’d give a free consultation. And if you’re ready to take that step, we’d be more than happy to help you. We know that each financial situation is unique, so we promise to give you the attention that you deserve when it comes to your financial plan.
Or maybe you’re still unsure about whether or not an annuity is for you.
That’s okay! There’s a reason that so few people have these, despite wanting them. They’re confusing, and if there’s one thing you don’t want to make a misinformed decision on, it’s your finances.
That’s why we are full of tips and tricks when it comes to understanding annuities. If you’re looking to become an expert, look no further than our expert advice!
We want you to be comfortable and confident in your financial future. So if you’re looking for more information on annuities, look no further than our site. We’re glad to help you learn more in any way that we can!
