Financial planners may try to sell you on the idea that there really is a magic formula out there for making your retirement money last forever. They present all kinds of calculations and charts to you, hoping you will buy off on their ingenious solution to your money concerns.
If you are looking for that magic formula to make your retirement money last as long as you do, you may be trying too hard. Your magic formula may be as simple as investing in an annuity. Saving enough money before retirement is the first way to make sure you do not outlive your money. Educating yourself about annuities as an alternative investment option is a good back up plan. Annuities can be a good investment for your retirement money because they offer benefits that other retirement investments do not. As with any new investment you should learn as much about it as possible before moving forward.
Why Your Money In An Annuity May Be Right
#1 – Control Risk
When you were young you were invincible. Risk was never an obstacle to your lifestyle or your investment direction. The older you get the more likely you are to be concerned about risk, especially investment risk. The more years we pack on the wiser we become. Once you retire you will probably want to stay retired. If your retirement money is subject to too much risk, your investments may lose value. If they lose too much value you may be forced back to work. Working after retirement is not what you planned to do. To avoid that financial dilemma, look into annuities; they are one of the best ways to control investment risk.
#2 – Spell Guaranteed
Retirement should be a stress-free time. Worrying about money does not spell stress-free. Annuities can help ease your money concerns because they give you what the stock market cannot. Annuities offer a guaranteed stream of income. Money invested in an annuity does not gyrate based on market conditions like it would in the stock market. Once you lock in on a payout option, you start the stream of income that is guaranteed for the rest of your live. You can also choose a payout option that guarantees that stream of income for your spouse.
Annuities are not for everyone. Some investors do not like the lock in, others prefer locking in to the ups and downs of the stock market. You need to be able to sleep at night, if your investments keep you up you need to choose different investments. If you are the type of investor who wants to get a better control over your investment risk plus need a guaranteed income in retirement, look into annuities.