If you have some savings put aside for retirement and are looking for a steady stream of income, some financial planners recommend considering annuities, which come in a variety of forms.
Dan Weber is the president of the Association of Mature American Citizens, and says first and foremost, looking ahead, make sure you’re not paying a monthly fee on a checking account. That’s money going out each month that could be spared by shopping around. The second thing you need, he suggests, is a plan. That may or may not include annuities.
As an example, there are fixed rate annuities with insurance companies. “You give them a large chunk of money and they give you an annuity for the rest of your life. The advantage is that you will get a guaranteed rate of return from an AAA insurance company that will pay you for the rest of your life,” Weber tells KTRH News. As for the downside, “The disadvantage is if inflation goes up and the annuity is fixed so you could lock in your money at a lower rate than you could get if your money is spread around,” he says.
There are deferred annuities, immediate annuities, fixed and variable, a fixed index annuity…only an experienced, reputable financial planner can help you determine what is in your best interest, Weber advises.
This article from Forbes Magazine may help you decide if annuities are something worth considering in your retirement portfolio.