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When Does An Annuity Make Sense?

| February 20, 2019
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Running out of money in retirement is a worry for many people. In fact, 55% of baby boomers and 57% of Generation X expressed outliving their savings is one of their greatest fears. 47% of millennials also have similar concerns.1 That’s a risk worth being concerned about. Investing in an annuity can help alleviate these retirement woes, but the question is when does it make sense for you?

  1. You want guaranteed lifetime income. Annuities can provide you with an income stream for as long as you live with certain ones that aren’t subject to market volatility and some that can help protect against inflation.
  2. You want to supplement Social Security and pensions. With Social Security designed to only replace about 40% of the average retiree’s income and the reduction of pensions, annuities are reliable in generating additional income.2
  3. You want to protect your retirement assets from taxes. Like traditional retirement accounts such as IRAs and 401(k)s, annuities also provide tax benefits. You don’t pay taxes until you begin making withdrawals, allowing your principal to grow tax-deferred over time.

Annuities can make a lot sense for those who worry about longevity risk and want guaranteed income. Call us and let us help you plan for tomorrow by determining how an annuity may strengthen your overall retirement portfolio.

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[1] https://money.usnews.com/money/retirement/articles/2018-05-30/what-happens-if-we-all-run-out-of-money-for-retirement
[2] https://www.ssa.gov/planners/retire/r&m6.html

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