A Retirement Decumulation Journey Annuities 101
That said, I am a huge fan of the biggest annuity of all time-Social Security. People rarely think of Social Security as an annuity but if you reverse the math it is easy to see it.If you waited until age 70 Social Security would pay $2,298/month, which equates to a $451,000 lump sum annuity purchase.
1. Contracts-Annuities are a contract with an insurance company; you give them a certain amount of money and they make certain promises. Keep in mind that sometimes the lower-rated companies offer better interest rates or product guarantees simply because they are lower rated and need to gather assets.
2. Spending Power-Decision making comes down to a trade-off between assuring your spending throughout retirement versus controlling your assets (see point 3).
3. Control-The opposite of point 2 is that if you put more into annuities to create an income stream, then you give up control of those assets.
4. Insurance Versus Investments-Annuities are insurance, not an investment.
1. Contracts-Annuities are a contract with an insurance company; you give them a certain amount of money and they make certain promises. Keep in mind that sometimes the lower-rated companies offer better interest rates or product guarantees simply because they are lower rated and need to gather assets.
2. Spending Power-Decision making comes down to a trade-off between assuring your spending throughout retirement versus controlling your assets (see point 3).
3. Control-The opposite of point 2 is that if you put more into annuities to create an income stream, then you give up control of those assets.
4. Insurance Versus Investments-Annuities are insurance, not an investment.
