With today’s volatile stock market, traditional investments in stocks and bonds can be risky. Sure, they can pay off big, but you could also lose everything. On the other hand, annuities can provide a steady stream of income allowing them to be a part of nearly any financial strategy. An annuity purchased from a financially strong insurer works quietly in the background, providing money, even when the economy is in the doldrums..
Whether you should add annuities to your strategy depends very much on your particular financial circumstances. Here are a few of the questions you should ask yourself when considering an annuity:
- Financial needs. Consider two things: current needs (the ones you have right now) and potential needs (financial issues that could conceivably crop up in the near future). Some annuities can pay out immediately, while others take decades to pay.
- Long-term goals. Some people want to spend their retirement cruising the French Riviera in the lap of luxury, while others prefer a more modest lifestyle. Whatever future you see for yourself, you need to make sure you’re putting aside adequate funds to keep living the life you want. Annuities can help provide a steady income for day-to-day expenses, but probably shouldn’t be your only form of retirement funding.
- Planning strategies. Take a good long look at your current portfolio. Are your investments high risk or are you mostly playing it safe and conservative? A good portfolio should include strategies across the spectrum of risk. By definition, fixed annuities are a form of low risk. How does that fit into your larger financial picture?
No matter what’s currently in your portfolio, chances are that an annuity can help you achieve your financial goals!