I want to share a great post from Jason Wenk, President of Retirement Wealth Advisors and a colleague of mine.
3 Primary Reasons To Consider Buying An Annuity:
Reason No 1: Not Having A Pension
If you’re like most people retiring today, you don’t have a traditional pension provided by your employer or the government. Or maybe you do have a pension, but it’s just not enough to maintain your desired standard of living when you retire (even with Social Security).
Having a retirement pension wasn’t as much of a problem back in the 80’s and 90’s because from 1982-2000 the S&P 500 shot up 1000% and the NASDAQ rose over 2000! When you’re making double digit returns in the stock market, you wouldn’t be overly concerned about whether or not you have a pension.
Recently the stock market has been performing at an all time high and we have even seen 20% gains in a single year. You NEVER want to gamble your retirement income and lifestyle on the market’s performance.
You don’t want to worry about monitoring the market to determine whether or not you can spend freely during your retirement.
You need to have certainty in having your living expenses covered by a guaranteed income stream that’s not affected by market downturns.
Reason No 2: Avoiding Running Out Of Money
According to a 2010 poll, conducted by Allianz Life Insurance, 61% of people said they fear running out of money MORE than they fear death. Are you absolutely certain that your money is securely protected from stock market swings? You don’t want your guaranteed income stream to be negatively impacted if the market doesn’t perform well.
Despite the market’s recent record highs, unforeseen stock market volatility poses a glaring concern for those approaching retirement and those already retired.
Regardless of how the market performs, people are still concerned that they may not have saved enough money during their working years to adequately fund their retirement lifestyle.
Due to these concerns, many people have been forced to extend their working years and delay their retirement, while others will be required to closely monitor their spending habits in retirement and put off family trips or donating to charitable causes.
In order to address these concerns, you need a sound financial plan that securely protects your money and guaranteed income payments for the rest of your life.
Reason No 3: Inflation Protection
Some consider inflation the “invisible tax” that flies under the radar and occurs gradually over a long period of time regardless of how the stock market performs.
Have you factored in the rising costs of goods into your retirement planning 5, 10 and 20 years down the road? As our money supply continues to increase (also dubbed as “quantitative easing” by our government), our purchasing power will continue to erode.
Are you certain that your retirement income payouts will keep up with the damaging effects of inflation?
Finding the right advisor that addresses inflation when you’re being sold an annuity can be challenging. A good financial advisor will help you determine which of your retirement expenses are inflation-prone, and will help you create an income plan that keeps ahead of inflation.
As life expectancy continues to increase, your advisor MUST address how inflation will impact your retirement, and if they don’t, run for the hills!
It’s very likely you’re being pushed to buy an annuity (or any investment product) WITHOUT a sound financial plan that protects you throughout your entire retirement.
So now you know the Top 3 Reasons people are considering annuities today as an alternative to traditional investments to secure their money and provide a stress-free retirement. Keep in mind that you only want to buy an annuity once it’s been properly tested against numerous others AND is included as part of a sound financial plan.
Do you still have some questions on whether an annuity is even right for you?
Contact me at Alin@SarasotaWealthAdvisory.com
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