Oncken Insurance Agency, P.C. Blog
If you are thinking of purchasing an annuity for your retirement income, then you might enjoy a lot of benefits from it. If you are looking for a way to generate more income for your retirement years, then you should know that your annuity provider will promise you a certain amount of income after a certain period of time. This guarantee is given in exchange for the sum of money. While annuities may have some advantages like complex rules, it has a number of benefits that you need to know more about.
Predictable Retirement Income
As you keep putting money into your IRA or 401(k) account, the amount of income that you will have for your retirement will eventually depend on how your investments have performed. As you know, the stock market can experience extreme volatility. Thus, if your portfolio decreases in value as your retirement approaches, you will not be happy to see much less income than expected. However, with a fixed annuity, you can have a specific amount of income regardless of market performance. This should help you sleep better at night.
A fixed annuity will guarantee you a specific amount every month but a variable annuity would pay you something that depends on how your account’s investments perform. The good thing about an annuity is that once that money is already in your account, it grows without taxes imposed on it. There are no taxes unless there is an early withdrawal. This makes your annuities similar to IRAs and 401(k)s.
No Limits on Annual Contribution
Though there are no taxes with IRAs and 401(k)s, there is a limit to the contribution that you have to make to them. The good thing about annuities is that there is no limit to what you can contribute to it and until when you will make contributions. The absence of annual limits allows larger lump sum compensations in the end. An annuity is one of the wisest investments there is.
Protection If You Outlive Your Savings
There are so many baby boomers who are afraid of outliving their savings, and they consider this even scarier than death itself. However, if you can get yourself a deferred-income annuity, you can be guaranteed a particular amount of money at a specific time in the future. This annuity can actually pick up where your savings have left off.
Some Final Words
Annuities may be very good investment vehicles, but they are not for everyone. They are not for people who do not like expensive fees as well as high penalties in case of withdrawing funds early. Also, you should not have annuities if you cannot wait for a long time. However, if you want sufficient and guaranteed protection in your retirement years, it is still best to go for annuities.
At Oncken Insurance Agency, we do our best in making sure that our clients are well-protected with affordable and comprehensive policies. We make sure to go the extra mile to help you with your needs. To learn more about how we can help you, please contact our agency at (281) 256-8310 or Click Here to request a free quote.