Investing in an annuity as one part of an individual’s retirement plan has been popular among many men and women due to the fact that annuities offer certain payout options which can be greatly beneficial for investors when it comes to meeting a stable source of income later in life. While different retirement investing vehicles can offer a wide range of benefits and, in many cases, investors are advised to diversify their retirement portfolio, annuities can offer a guaranteed period of income for investors that could offer payouts for the rest of their life.
Annuities can offer lifetime payment options or a guaranteed option that will provide funds to an investor for a set period of time. Obviously, individuals who can invest in an annuity early can build up a substantial sum and, when it comes to opting for lifetime payments, the payout during one’s retirement years can be greatly helpful when it comes to meeting costs after one has left their job and is relying on retirement funds to get them through their retirement years.
While annuities can offer different options, there are advisors who caution investors to research their investing options when it comes to annuities and make sure they choose the right plan for their particular situation and retirement needs. Again, individuals who are investing in retirement may want to diversify their options as simply keeping money in a 401(k) or IRA, for example, could be problematic if difficulties were to arise that either caused an investor to lose money from one of these accounts or if high taxes were incurred that would cut down on the total they could withdraw.
However, an article on SmartMoney.com suggests that, among other things, potential annuity investors need to look at the costs that will be associated with an annuity, what the potential payouts could be, and when reviewing different types of annuities, investors need to make sure that this is a sustainable income option for their retirement planning and goals.
Obviously, the more that any investor can build up in a retirement account, the more beneficial it will be later in life and, for this reason, men and women who may not be long into their career should consider these retirement options as the more time one has invested into a retirement account, meaning more funds that have been contributed, the more security that may be gained after retirement. Yet, essentially it comes down to an investor’s decision as to what retirement plan or plans they choose as, again, not all retirement options will meet everyone’s financial goals for retirement. Reviewing what each retirement account can offer, be it a Roth IRA or an annuity, it is one of the first steps that investors must take so that they can set themselves on a path that allows them to begin building a safety net to meet their personal needs and goals after retirement.