One of the most important questions or concerns about retirement is how will you pay for it all? Saving as much money as you can, as early as possible, is a great strategy but is sometimes difficult. Also, long term savings rates can be less than stellar. Today’s retiree can’t simply rely on a company pension or Social Security income. Even if you have waited to save, you aren’t totally out of luck – you can start an individual retirement account (IRA) at any time. Another way to be financially supported in retirement is through retirement annuities. Buying a retirement annuity with a portion of your savings can be an excellent way to ensure income for the rest of your life.

Retirement annuities, which are more commonly known as an immediate annuity, are a contract between you and the issuing insurance company. When buying retirement annuities with a single premium deposit, you turn over control of that money to the issuing insurance company. In return for control over your money, they apply a competitive interest rate to your principal and pay you a monthly (or whatever frequency you choose) payment, just like income, that is typically guaranteed for life. If non-qualified funds (not part of your IRA) are used to purchase your retirement annuity, taxes are only owed on a portion of the income payments. The issuing insurance company calculates, depending on your deposit and life expectancy, the payout amount that you will receive. This amount is the same for the entire payment term (most often until you die), unless you elect a Cost of Living Adjustment (COLA) option.

Retirement annuities can make it easier to plan for future activities or to pay increased healthcare or family education costs. Most people use retirement annuities as a supplement to pension income or Social Security. After retirement, the peace of mind offered by a monthly paycheck is valuable. Retirement annuities are being purchased by retirees and baby boomers close to retiring as a way to secure their income; funding can come from underperforming assets, such as money languishing in a low-interest savings account, portions of 401ks or IRAs, or even lump sum inheritances.

Is there room for retirement annuities in your retirement plan? Call the BuyAnnuitiesOnline.com Specialists at 1-800-994-3023 to learn more about the benefits of purchasing retirement annuities.