Go the Annuity Route to Avoid Unpredictability
Go the Annuity Route to Avoid Unpredictability
Go the Annuity Route to Avoid Unpredictability Most retirement income plans are unpredictable. You don’t know how long you will live and if the money will last. You don’t know if stocks will go up or down. You can’t be sure if dividends will get cut or what interest rates will do.If you are concerned about unpredictability, then a lifetime annuity with inflation protection and spousal support might be the way to go.And, you can now get pretty sophisticated with annuities. “In years past, the alternative to riding out a bumpy stock market while trying to create a steady retirement income was to take the money out of the market and put it into an immediate annuity,” notes Sean Clark, principal with York Independents, in York, Pennsylvania.Clarke says there is a different method available for middle class investors today, and is a solution that he uses with great frequency. “The solution is an equity indexed annuity with a lifetime income benefit rider,” he explains.“This account functions similarly to any other type of investment or deposit account, in which the investor retains full control over the investment, but it also provides for an income guaranteed by the annuity company to last at least as long as the client does. This eliminates longevity risk for the client, and creates a level of confidence in their ability to retire which is unavailable in mostly any other investment.”With the proper education, most investors find this option easy to understand, and “consider it to be a no brainer,” he adds. “Proper use of the index annuity represents the best modern theory of retirement income creation.”Use an annuity calculator to see how much income you can afford and assess if an annuity is right for you. Or, check out how Glen Nakamoto, a Boldin user, constructs his retirement income using an income floor.Better yet, model an annuity as part of your complete retirement plan with the Boldin Retirement Planner and assess if how it impacts your finances and peace of mind.