Hate Annuities? You Might Change Your Mind
Have you always thought annuities are bad? Let me help you change your mind! An annuity can provide an endless pension-like income stream. The need for an income floor depends on each individual’s risk tolerance and overall investment goals. How much risk can you shoulder determines how much risk you may want to transfer.
You can set income payments to start when you need, now or in the future.
You can 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. You may enjoy the risk involved in playing the investment game. This doesn’t automatically exclude your interest in a contractually guaranteed income floor in the future. Your spouse may be more interested in guarantees than the market fun. Annuities provide contractually guaranteed income for life for both of you, a guarantee unique to annuities.
You can create an income floor for the future. An income floor is usually designed to cover the amount needed every month to cover expenses for you and/or your spouse. There are many types of annuities, so individuals can find a product that fits their particular situation. They are primarily used to contractually fill income gaps and provide a pension-like lifetime income stream.
You can find an annuity to fit your situation based on premium amount available or based on expected expenses per month. It is a way to prepare an established safety net of income for a spouse dealing with the death of their partner.
Not everyone needs the security of a steady income floor, but if a guaranteed lifetime income is sought after, annuities fit the bill. Even a passionate “annuity hater” should be able to recognize the benefit of guaranteed income for life that annuities singularly offer. A more beefed out explanation is found in the original article. This article from TheStreet.com may change your mind, if I haven’t already.