Senior Resources » Top 5 Reasons to Buy an Annuity for Retirement

Top 5 Reasons to Buy an Annuity for Retirement

An annuity is basically a contract that you make with a financial institution. You pay either a lump sum or monthly premiums to an insurance company, and, in turn, they promise to provide you with a future stream of income (usually, for life).


Types of Annuities

Fixed Annuities

Fixed annuities are the most simple. They provide predictable and reliable income with low fees. Cash can accumulate a fixed rate of interest that’s tax deffered.

Indexed Annuities

An indexed annuity pays interest based on the performance of a specified market index, like the S&P 500 (the 500 leading publicly traded companies in the U.S.). 


Variable Annuities

Variable annuities vary based on the performance of investment options that the annuity owner can choose.


Why Buy an Annuity For Retirement?

An annuity may not be for everyone. But, for many who are worried about the possibility of outliving their retirement, it can be the perfect solution. So, why buy an annuity for retirement?

1. Annuities provide guaranteed and predictable income.

Annuities are insurance products, not high-risk investments. Once an annuity is purchased, the owner can rest assured that their money will be paid out as a steady stream for as long as their contract specifies.

2. An annuity provides safety and protection.

Annuities guarantee monthly payments which prevents you from running out of money. They safeguard your retirement.


3. Annuities provide protection from things like stock market crashes.

Depending on your type of annuity, your principal and earnings are protected from loss if there’s a stock market crash. Fixed rates of interest protects your money.

4. You can customize annuities.

Your annuity can be customized based on your retirement goals and financial needs.

5. Annuities can help with your legacy.

Most annuities allow you to pass on their value to your beneficiaries.

Special Report: Retirement Watch Special Report: The Truth About Annuities and How to Make Them a Lifetime Stream of Income

More Help With Annuities & Retirement Planning

Need more help with annuities? Then start here.


Or, visit Bob Carlson’s Retirement Watch for expert advice on annuities and other retirement planning subjects.

Originally published October 10, 2022

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