Broker Check

Are Annuities Right for You?

June 21, 2023

Annuities can be an excellent addition to your financial and retirement portfolio, but it's essential to determine whether they're the right fit for you and your financial goals. Here are some ways to know if annuities are right for your financial portfolio.

If you're looking for a guaranteed income stream to supplement your retirement income, annuities can be a good option. However, if your retirement goals involve greater wealth growth or higher levels of liquidity, annuities may not be the best fit. It’s important to note that all guarantees are subject to the claims-paying ability of the insurer. Guarantees apply to minimum income from annuities and do not guarantee an investment return. Lifetime benefits are often an additional rider.

Ensure that your risk tolerance matches that of the annuities available to you. Annuities are generally considered low-risk investments. If you're someone who is risk-averse and prefers a predictable income stream, annuities can be a good fit. However, if you're in a situation where taking on more risk can help your retirement funds more, annuities may not be the best option.

Some types of annuities can provide tax-deferred growth, meaning you won't pay taxes on your earnings until you withdraw them. If you're looking for a tax-efficient way to save for retirement, annuities can be a good option. However, if you're in a low tax bracket and won't benefit from the tax-deferred growth, annuities may not address your tax concerns.

Make sure to evaluate the fees and charges. Annuities and their customized components can come with fees and charges that may not fit your financial situation. Make sure you understand the fees and charges associated with the annuity before investing. If the fees and charges are too high, it may not be worth it.

Annuities can be a wonderful retirement income solution for some, but it depends on what your financial goals are and what kind of annuity you end up purchasing.


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This document is for educational purposes only and should not be construed as legal or tax advice. One should consult a legal or tax professional regarding their own personal situation. Any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products offered by an insurance company. They do not refer in any way to securities or investment advisory products. Insurance policy applications are vetted through an underwriting process set forth by the issuing insurance company. Some applications may not be accepted based upon adverse underwriting results. Death benefit payouts are based upon the claims paying ability of the issuing insurance company. The firm providing this document is not affiliated with the Social Security Administration or any other government entity.