Hate Annuities? You Might Change Your Mind
Who doesn’t like a guaranteed income stream?
There are many types of annuities, so how can you hate them all? They are primarily used to provide a pension-like lifetime income stream and contractually fill income gaps. Still think annuities sound bad? Let me help you change your mind! Individuals can find a product that fits their particular situation.
Each individual’s risk tolerance and overall investment goals determine a need for guaranteed income
How much risk can you shoulder determines how much risk you may want to transfer. Peel off growth of other investments to place the funds in an annuity, if you are motivated to transfer the risk of outliving your money. Annuities provide an endless pension-like income stream.
Annuities provide contractually guaranteed income streams for life for you and/or your spouse
This lifetime income stream guarantee is unique to annuities.You can create an income floor for the future. An income floor equals the amount needed every month to cover expenses for you and/or your spouse.
You can find an annuity to fit your situation based on premium amount available or based on expected expenses per month.
Tolerance to risk doesn’t automatically exclude interest in contractually guaranteed income
Enjoy the risk involved in playing the investment game? You may want to place some money in an annuity that provides a guaranteed income floor. Even if you have a high risk tolerance, you might need them. Guaranteed income payments can be more interesting at some point in the future to you and/or your spouse. Playing the market is great. A secure and guaranteed lifetime income stream is invaluable.
Annuities provide a the safety net of guaranteed income stream.
Annuities establish a safety net of income. A spouse dealing with the death or expected death of their partner might need or take comfort in the security of a steady income stream for life. Set the annuity income payments to start now or in the future.
Even a passionate “annuity hater” recognizes the benefit of guaranteed income for life that annuities singularly offer. This is a condensed version of an article originally published on TheStreet.com. All it takes is more familiarity with annuities to understand they can be a useful financial tool in certain situations.