The secret to feeling good about your retirement is being certain you’ll have money for as long as you live. An annuity is a tax-deferred tool that can guarantee you an income even if you live to be 100. It’s a great way to help fill the gap between what you currently have coming to you—through pensions, Social Security, savings—and what you’ll actually need to live.
What Is an Annuity?
An annuity is a contract between you and an insurance company. The insurance company invests your money for you, and, depending on your annuity, you may receive a regular payment based on the success of the investments. Income on annuities is not taxed until withdrawn from the contract, making annuities a tool to save for retirement.
An Annuity Might Be Right for You If You:
- Have maxed out your contributions to 401(k)s and IRAs.
- Like the idea of having your annuity pay out periodically, like a paycheck, after you’ve retired
- Have someone in your life you want to assure is taken care of financially after you are gone
- Are comfortable leaving a chunk of your money untouched for at least 7-10 years.
- Are fairly certain you will not withdraw the money before you’re 59 1/2