A 2009 Gallup poll recently indicated that only 42% of its participants still expect their 401(k), IRAs and other retirement savings plans to be a major source of retirement income—the lowest measure since the annual survey began, indicating that more than half of the nation’s retirees are looking for a safer plan for their retirement income.
For people of retirement age, or those planning for their retirement, fixed annuities may fit the bill, providing a dependable, steady stream of income. A fixed annuity is a contract with an insurance company that guarantees a fixed rate of return during the life of the contract. Payments can be structured to last for a specific period of time, or for the rest of the contract holder’s lifetime.
There are a variety of annuities available. An Immediate annuity, for example, requires a lump sum investment upfront, and payments start immediately. A Deferred Fixed Annuity can be attained with either a lump sum payment in the beginning, or a series of payments, with the contract beginning on a predetermined future date. 
Income from these accounts depends on a variety of variables, such as the amount paid in premiums, the contracts rate of returns, the age, gender, and general health of the contract holder, and the number of years over which the income payments will be received.
Is an annuity right for you? Consider your situation. With almost unlimited products, it is important to understand ALL the features and liquidity access. If you need access to the money sooner than you expect, there may be unanticipated fees.
The down side taken into account, annuities provide a guaranteed income. The return, although not as attractive in a bull market, provides steady growth and are popular for those seeking safer avenues to grow their money.
The guaranteed income of a fixed annuity may help remove some of the uncertainty associated with retiring when the markets are fluctuating. There are a variety of options, and Todd Ehret will be happy to tell you more about them should you have any questions.
{ 4 trackbacks }
{ 0 comments… add one now }