Should You Consider Getting an Annuity for Your Retirement Savings?

By Robert Jacovetti

You never want to be in the position of having outlived your retirement savings and ending up with crippling debt problems. When this happens, you can become completely dependent on family and friends in order to survive. You work hard and you deserve to live your Golden Years with dignity. That’s why you may want to consider investing in an annuity, which could potentially provide you with some financial relief after you have retired.

However, what kind of annuity, if any, will be best for you? Kent Smetters, an economics professor at the University of Pennsylvania’s Wharton School, recently talked to National Public Radio (NPR) about various types of annuities and explained when, and which type of, annuities make the most sense for people who are concerned about their financial futures.

An annuity, whether it’s a fixed annuity that pays out a constant amount of money or a variable annuity that provides certain tax benefits, can give you major advantages after you have retired and are no longer earning a steady income.

Smetters notes that when you pay into an annuity, you are securing your future by assuring that you will receive a monthly check going forward. This steady source of revenue can protect you against misfortune and provide you with peace of mind. Moreover, a unique aspect of annuities is that they tend to go up over time, meaning that you will receive larger checks the longer you live.

Having said all that, it is important to realize that not all annuities are great opportunities. That’s why Smetters cautions that anyone looking to buy into an annuity should thoroughly examine all of their options before doing so. Additionally, it would be in your best interests to speak with a knowledgeable debt management lawyer before making any final decisions that could affect your financial future.

For additional information, read the article, “Planning for Your Retirement: Understanding Annuities.”