The right answer depends on many factors. In general, annuities are designed for those who foresee a gap in their retirement income. Annuities can address these gaps with guaranteed income.
An annuity may be right for you if:
If you want to know for certain that you won’t run out of money in retirement, annuities can help. They provide similar predictability and guarantees as Social Security (a type of government annuity) with more options.
If you’re currently developing a strategy for how and when you’ll retire, now’s the time to think about annuities. This generally applies to people age 50 and above, although today annuities are capturing the attention of those who are younger, too.
Other reasons to look at annuities:
Deferred annuities — annuities that pay income at a later date — also offer tax advantages. Finally, annuities offer a convenient, private way to transfer wealth to your heirs.