Is an Annuity Right for Me?

By Cathy DeWitt Dunn

A question that we hear quite often around here is, “Is and annuity right for me?” That’s also a question we talk about in great depth each week on our radio show, DeWitt and Dunn Financial Services Radio.

The truth is: we can’t answer that question until we know more about you – where you are in your retirement income planning, and what your income goals are during your retirement. Everyone’s goals, and the paths to reach those goals, are unique.

Bearing that uniqueness in mind, we would like to share with you several client scenarios that we see on a regular basis in our practice. These real-life examples are meant to offer insight on how fixed index annuities may fit into your own personal retirement income planning.

If you’ve found yourself in one or more of these situations, it may make sense to consider a fixed index annuity as part of your retirement portfolio.

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Real-life scenario #1: You have worked hard to accumulate money in your retirement account. You’ve maxed out your 401k for years. Now, you’re approaching retirement and it’s time to figure out how to transition from wealth accumulation to income generation. You need to put an income strategy in place that helps you to maintain your standard of living throughout your retirement years with income you can’t outlive.

Real-life scenario #2: The past few years have taken a brutal toll on your investment portfolio––and your sanity. You are tired of the stress that comes with the ups and downs of the stock market. You’re tired of seeing your hard-earned retirement savings lose value with big market drops. You need more stability. However, you’re looking for a bit more earning potential than what today’s bond options or Certificates of Deposit (CDs) can provide you. You are looking for a safer alternative to the stock market –– one that provides principal protection with some exposure to market upside.

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Real-life scenario #3: You are comfortable with playing the markets––to a point. However, you believe in diversifying your risk and are looking to shield some of your money against catastrophic stock market loss. You’ve done the math and you’ve figured out what portion of your portfolio you cannot afford to lose. You suspect that while an FIA is definitely not right for all of your money, it just might be right for some of it.

Fixed index annuities have answered the retirement income needs for individuals facing a wide variety of retirement planning scenarios. By providing exposure to market-based gains and eliminating losses, FIAs have proven to be an excellent alternative to the stock market. It is no wonder that these plans are one of the fastest growing asset classes with $150 billion invested over the past six years.

What’s Next?

Have questions of your own? Schedule an Appointment.

Like to learn more about fixed index annuities? Watch our free video series.

Interested in learning about annuity rates? Request more info.

Annuity product guarantees rely on the financial strength and claims-paying ability of the issuing insurer. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. Please consult with a professional specializing in these areas regarding the applicability of this information to your situation.