Broker Check

You’re Interested in Annuities but Rumors are Holding You Back

| August 26, 2020

If the fear of outliving your retirement savings really haunts you, then looking into income sources that will keep going as long as you do may not be such a bad idea. You can potentially alleviate this financial anxiety by considering an annuity as a part of your retirement planning. 

Misinformation about annuities have floated for years, but the truth is, annuities help to diversify retirement portfolios and are one of the few financial solutions that address guaranteed income for life. If you’re interested in adding this to your retirement portfolio, let’s clarify some myths1 so you can focus on the important questions regarding types of annuities, how they work, and which is right for you.

Myth #1: Annuities will lock up my money that I might need for an emergency.

Truth: Annuities have a surrender period, the time you must wait until you can withdrawal all your funds without penalty, as this type of investment is designed to be long-term. However, most annuities do allow for withdrawals up to a certain percentage (typically 5-10%) each year without penalty.

Myth #2: All the lifetime income I need will come from my retirement accounts.

Truth: It only takes one unexpected expense such as a serious illness or disability to affect and deplete your financial cushion. In addition to pensions and Social Security, only annuities can guarantee you won’t outlive your income.

Myth #3: The money I invest will be gone when I die, and I intend to leave something to a beneficiary. 

Truth: Like deleting a file on your computer, nothing is gone for good. In the event you pass away prematurely, the built-in death benefit allows that the remaining account value be passed on to beneficiaries. Plus, this structure avoids the costly probate process.

Understanding the types of annuities available and which is right for you can be a huge undertaking, so a conversation with your financial advisor is going to help you make smart choices. Call us and let’s have a conversation.


This document is for educational purposes only and should not be construed as legal or tax advice. One should consult a legal or tax professional regarding their own personal situation. Any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products offered by an insurance company. They do not refer in any way to securities or investment advisory products Insurance policy applications are vetted through an underwriting process set forth by the issuing insurance company. Some applications may not be accepted based upon adverse underwriting results.  Death benefit payouts are based upon the claims paying ability of the issuing insurance company. The firm providing this document is not affiliated with the Social Security Administration or any other government entity.

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