An annuity is a promise or a commitment made by an insurance company to fulfill their obligations to you under the terms of a contract. All annuities that promise to pay out a specific amount of income for either a specified period of time, or for as long as you may live, are guaranteed annuities. For people who need or want income when they retire, buying a guaranteed annuity can be a good way to meet that goal.
Annuities are not all designed the same. In some instances, it may be appropriate to buy an annuity that pays out for a certain term or period of time. The best annuity for retirement will usually be a guaranteed annuity that will provide periodic (usually monthly) income for the rest of your life. While there are many things to like about an annuity, there are also some limitations that you should be aware of so you can make an informed investment decision.
Guaranteed annuity pros
- Your income is guaranteed for your life
- You can have the income continue for your surviving spouse’s life.
- Current annuity rates are usually higher than current CD rates.
- Payments can have an annual COLA to keep up with inflation.
Guaranteed annuity cons
- Once you sign the bottom line, there are no “do-overs” if you change your mind.
- Buying when annuity rates are low subjects you to the risk of having your money “locked in” to a low fixed rate in a rising interest rate environment.
While very few things in life are guaranteed, you can guarantee that you will never run out of money in retirement by buying an annuity. We are here to help you find the best annuity for retirement with the highest annuity returns. Get started today by clicking on the orange button for a free, no-obligation annuity quote.