Annuities Provide More Secure Options for Retirement

by Jones Taylor

IRAs and 401Ks may be the best ways to plan for retirement, but they have their limits, mainly in how much you can contribute to them. If you’ve grown accustomed to a certain standard of living, the last thing you want to worry about in 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.

Many people face retirement worried that they’ll outlive their savings, with good reason for concern. If your 401K runs out or IRA gets depleted, where will you turn? What if that income simply isn’t enough? With an annuity, retirement payments will keep coming in, 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.

Yet there’s always the possibility you’ll end up better off financially than you thought you would have been in retirement. Perhaps, you’ll have more than enough finances to live comfortably, and may prefer that annuity in a lump sum to invest in a vacation home or buy a boat. Just a few years ago, you’d have been stuck for life with the annuity. Sell that annuity was something you just couldn’t do, or you’d face paying steep taxes and not get nearly the value you invested.

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 simply makes a secure nest egg. Financial security is the key to your contentment and happiness long into retirement. Annuities guarantee you’ll never outlive your savings. Yet if you find it something you no longer need, you can always sell it and take the cash in a lump sum for other investments or if you face a financial emergency. Investing in annuities is a good way to hedge your bets long into retirement, a guarantee you won’t outlive your income.

About the Author:

Jones Taylor has written numerous articles about Annuity retirement and Annuity sell that will assist those who don’t know terms such as annuity, retirement income and more.