Considering Annuities but Unsure Due to Common Myths?
If the fear of outliving your retirement savings haunts you, then looking into income sources that can keep going as long as you do may not be such a bad idea. One way to potentially alleviate this financial anxiety is to consider an annuity as a part of your retirement plan.
Misinformation about annuities has floated for years, but in truth, annuities can help diversify retirement portfolios and are one of the few financial solutions that address guaranteed income for life.
Myth #1: Annuities are for retirees only
Truth: Annuities can help many people trying to save for their retirement. If your employer-matched savings plans and IRA contributions are maxed out, deferred annuities can be a tax-efficient savings vehicle that can turn into income later.
Myth #2: Annuities are expensive
Truth: Many annuities are competitively priced and don’t charge a maintenance or annual fee. Optional riders provide additional benefits; however, these may come with an annual charge.
Myth #3: Annuities won’t supplement retirement income
Truth: Various payout options can provide a steady stream of income. Additionally, for an additional fee, income riders can help grow your income base for more guaranteed income.
Myth #4: Annuities are too complex
Truth: Annuities can vary in complexity, but some types, like fixed annuities, offer more easy-to-understand options. Working with a financial advisor can help you navigate the choices and find the best fit for your financial goals and situation.
Myth #5: Annuities are not regulated
Truth: Annuities are regulated by state insurance departments, and insurance companies offering annuities must meet strict financial requirements and adhere to regulations to protect consumers.