As you plan for retirement, you have many options, including retirement annuities. Here we take a closer look at when to consider annuities for retirement and whether this financial route may be the best for you.
How Do Annuities Work for Retirement?
Annuities are attractive to some retirees because they help build tax-deferred savings and protect the money that is saved over a lifetime. They also provide retirees with peace of mind that a steady stream of income will continue after they’ve stopped working.
Deferred Payments
Annuities work through insurance contracts that require you to pay a lump sum or series of payments so that the insurance company can invest your money and provide payments over time. You can receive these payments right away or defer them if you don’t need money immediately.
Pros and Cons of Annuities for Retirement
When considering the pros and cons of annuities for retirement, it’s important to understand that annuities are not inherently risk-free. Fixed annuities, for example, offer a guaranteed rate of return, but variable annuities can fluctuate depending on where your investments are.
Annuity Fees
For many reasons, annuities are better suited to some types of investors than others. It’s also important to know what the annuity fees are and what other options are available to you, such as rolling your 401(k) into an IRA and working with a financial advisor.
Selling Your Retirement Annuity Payments for Cash
Why sell a retirement annuity for cash? As we get older, our financial needs tend to change and our priorities shift as well. This is the time of life when many retirees want to travel and see the world. Other retirees want to invest in their children and grandchildren by helping them buy new homes or go to college. And unfortunately, health concerns tend to increase with age, which translates into unexpected medical bills.
Looking to Discuss Your Options?
At Novation, we’re experts in annuities and we can help you get a lump sum of cash for your annuity payments right away. If you want to discuss the best way to approach retirement and what to do with your annuities for retirement, contact us here or at
*Novation is not a financial advisor or consultant and strongly recommends that you speak to a lawyer or accountant before making any significant financial decisions.
