Many investors are beginning to look more at various options for retirement planning, as opportunities for annuities, Roth IRAs, and continued 401(k) investment options are felt to be more helpful when saving for retirement as there are some who fear that their current savings or future savings, coupled with questionable Social Security benefits, may not leave them with enough funds to make it through their retirement years. Yet, while there are arguments that consumers should diversify their retirement savings, many who turned to annuities do so because they can provide a stable income for investors after they have retired.
Annuities can have a great deal of advantages for individuals who are at various points in their career, as these tax-deferred accounts have no contribution limit, which can make them ideal for individuals who may be later into their career or close to retirement and want to make up grounds that may have been lost through setbacks in their investing or simple lackluster investing habits.
Also, annuities allow for a cash out option of either taking a lump sum of money which has been built up by the investor or there are also options that are beneficial when it comes to individuals looking for a stable income. Guaranteed payments can be made for a set period of time or, in some cases, the rest of an investor’s life, which will provide a more stable form of income in many cases. Yet, investors who are drawn to annuities for this particular aspect need to understand that there are guaranteed payments through this form of investing, but the amount that an individual may draw will depend on their contributions, age, and earnings, especially if they choose to receive these payments for the rest of their life.
Annuities have been one method that investors have used to secure their future, but this is only one retirement option that investors need to explore as, in the majority of cases, financial advisers often counsel investors to diversify their retirement plans so as to increase the potential for more earnings and money that can be accessed later in life.
However, when it comes to investing in annuities there are those who feel that this option is better left until after IRA options or an employer’s retirement plan happens to be exhausted. In fact, Dr. Don Taylor of Bankrate.com stated that the added strain of fees that may come from an annuity simply are not worth it early in one’s career while there are still options for building wealth to be taken advantage of by individuals who may not be near retirement age.
Yet, when it comes to finding options for retirement planning, annuities can be a valuable tool in a retirement portfolio, but investors must make sure that they are not only at a point where contributing to an annuity is affordable, but they have set in place other forms of retirement plans that can be beneficial for their financial needs later in life as well.