It’s true that IRAs and employer sponsored plans are the best ways to plan for retirement, but they have their limits, mainly in the amount of contributions you can make to them. If you’ve enjoyed a successful career, it’s likely you’ve become accustomed to a certain standard of life, one you’d like to continue to enjoy well into your retirement. The last thing you want to worry about in your retirement years is your budget.
If you invest in an annuity, retirement savings don’t have to be limited. Long after you’ve maxed out your contributions to IRAs and 401Ks, you can still purchase annuities, guaranteeing a steady flow of cash that you can depend on.
For good reason, one of the greatest fears many face in retirement is outliving their savings. Living too long shouldn’t have to be something you have to worry about, but if your savings run out, if your 401K or IRA gets depleted, where will you turn? With annuity, retirement payments never run out, so you will have a continual inflow of cash, no matter how long you live.
That’s probably why nearly 10 million people facing retirement today are purchasing annuities. It’s a reliable flow of income that you can depend on or just save as a nice safety cushion of savings for unexpected expenses you might face in your retirement.
Of course, there’s always the possibility you’ll end up better off financially than you planned. Maybe you’ll have more than enough savings to live comfortably, and prefer the annuity in a lump sum in order to invest in a dream home or buy a boat. Just a few years ago when there was no market for it, you’d be stuck with that annuity. Sell an annuity would have been previously impossible. You were pretty much stuck with it.
Fortunately, that’s no longer a problem. The rules and markets for annuities have changed. A secondary market now exists. If you no longer need the annuity, sell it. More and more people are doing it, with new annuity sales now topping $200 billion a year. Annuities are now sold as asset backed securities to big institutional investors.
It’s possible you’ll prefer the money in a lump sum for other investments or an unforeseen financial emergency. You’re never stuck with the annuity. With the demand annuities enjoy in the market, they are as good as cash.
An annuity is a good nest egg to have. It provides the security your contentment and happiness depend on in retirement. It’s a guarantee that you’ll never outlive your savings. At the same time, it’s a salable asset, perfect for when you need a lump sum for either a dream home or a financial emergency. Investing in annuities is simply a safe way to hedge your retirement, adding up to solid security or a valued commodity that can be sold for cash when you need it.
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