Retirement Planning: Annuities and When They May Make Sense

    by William Reichenstein

    Retirement Planning: Annuities And When They May Make Sense Splash image

    Individual investors are often encouraged to consider annuities of one form or another. Sometimes this comes from an insurance agent or insurance company pushing a particular annuity product, and sometimes annuity investments are part of a retirement program. Annuities are also a distribution option for retirement monies.

    Annuities are complex investments that can be difficult for investors to analyze. High costs often outweigh the benefits associated with annuities. In certain circumstances, however, they can be beneficial—particularly when it comes to the distribution option for those who are living off of retirement assets.

    However, in order to understand the benefits, you need to understand how annuities work. In this column (as well as my next), I will provide a primer on annuities. This first article concentrates on annuities as an accumulation option for retirement savings, focusing first on the major features in most contracts and then presenting a framework that will allow someone to decide if an annuity is right for him or her.

    ...To continue reading this article you must be registered with AAII.

    Gain exclusive access to this article and all of the member benefits and investment education AAII offers.
    JOIN TODAY for just $29.
    Log in
    Already registered with AAII? Login to read the rest of this article.

    Register for FREE
    to read this article and receive access to future articles.
    → William Reichenstein