Planning for retirement involves more than just saving money—it requires a strategy that ensures a steady income stream once you stop working. Annuities are a popular choice for many retirees, providing guaranteed income, tax benefits, and peace of mind. But with so many options available, choosing the right one can be daunting.
In this article, we’ll break down eight expert-approved annuities that can help secure your retirement and ensure financial stability in your later years.
1. Fixed Annuities: Guaranteed Income for Life
Fixed annuities provide predictable, guaranteed income for a set period or the rest of your life. This type of annuity is ideal for retirees who want to know exactly how much money they will receive each month. Fixed annuities protect you from market volatility, making them a safe, stable choice.
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2. Immediate Annuities: Start Receiving Payments Right Away
Immediate annuities begin paying you income immediately after a lump sum payment. These vehicles are perfect for those who need income right away.
With predictable payments and no risk of market fluctuations, they offer a reliable income stream when you need it most.
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3. Deferred Income Annuities: Delay Payments for Future Security
Deferred income annuities allow you to start receiving payments later, providing you with income when you’re older. These annuities are great for those who want to ensure long-term financial security.
The longer you wait to start receiving payments, the higher your income can be.
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4. Variable Annuities: A Flexible Option with Market Growth Potential
Variable annuities offer a blend of guaranteed income and potential market growth. Your payments depend on the performance of investments you select within the annuity so that you can earn more based on the market’s performance.
While the return isn’t guaranteed, variable annuities can be an excellent option for those seeking more growth potential with some level of security.
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5. Fixed-Indexed Annuities: Combine Stability and Growth Potential
Fixed-indexed annuities offer the stability of fixed annuities with the potential for higher returns based on a market index’s performance.
This type of annuity can be a great option for those who want to protect their principal while still having the chance for some growth based on market performance.
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6. Qualified Longevity Annuity Contracts (QLACs): Secure Your Future
QLACs are a deferred annuity designed to start paying out at a later age, such as 80 or 85. They are an excellent option for individuals who want to ensure they don’t outlive their savings.
QLACs appeal to those who have maximized their tax-advantaged retirement accounts and want to convert part of their savings into guaranteed income later in life.
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7. Income-Only Annuities: Focus on Income, Not Growth
Income-only annuities focus solely on providing you with regular income without the intention of growing your savings.
These are perfect for individuals who want a simple, reliable income source in retirement without worrying about managing investments. With these annuities, your payout is guaranteed for life or a set number of years.
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8. Joint and Survivor Annuities: Provide Income for Both You and Your Spouse
Joint and survivor annuities provide ongoing income to both you and your spouse for life. When one spouse passes, the other continues to receive payments, ensuring both parties are covered.
This is an ideal option for couples who want to provide financial security for the long term.
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Choosing the Right Annuity for Your Retirement
With so many annuity options, choosing the right one for your retirement goals can be challenging. It’s important to evaluate your desired income, risk tolerance, and how long you need your payments to last.
Consulting with a financial advisor can help you navigate your options and select the best annuity for your needs.
