If you are a retired or near-retired woman, let me ask you this: how do you plan to use what you have saved so diligently and turn it into a reliable, predictable, and tax-efficient lifetime stream of income? advantageous?
If you’re like many of us, you probably don’t have a ready answer to this question. It’s because you’ve been busy doing “all the right things.” You’ve worked, saved, maxed out your 401(K), paid off debt, been a caregiver, run a household, etc. Chances are you haven’t really had time to think about what to do when it comes time to work and live off what you’ve accumulated.
I want to suggest: Take the time to carefully review annuities. After spending time researching this often overlooked but powerful financial vehicle, I have come to believe that almost any woman who is considering retirement could benefit from the features of annuity products.
Here are a few reasons why you should consider an annuity when it comes time to empty your “accumulation” bucket:
1. An annuity creates guaranteed income for life. When you deposit a lump sum into an annuity, you enter into a contract with an insurance company in which the company guarantees you an income for the rest of your life. This will eliminate one of the main concerns of many women entering the retirement phase of their lives, which is running out of money too soon.
2. Flexibility and customization. Annuities have come a long way in recent years, offering a full range of long-term care and inflation protection features. You are no longer constrained to a “one size fits all” annuity. These new types of annuities now offer a new level of customization, security and functionality.
3. Annuities provide predictability. Many people, especially those in the pre-retirement and retirement stages, want to know exactly how much income they will have when they retire. If predictability is one of your top priorities, an annuity can provide that.
4. Zero maintenance. When you accept the terms of the annuity contract, you are guaranteed a stable income for life, even if you live another 50 years after retirement. An annuity is one of the few financial products available that you can truly “set and forget”. there is nothing to tweak or move; no more crossing your fingers every time the market hiccups.
5. The tax benefits of using an annuity for part of your nest egg allows that part to grow tax-free, just like money in traditional retirement accounts. This means that if you don’t withdraw all the money for a certain period of time, you could benefit from a significant tax reduction in retirement.
There are many other reasons why an annuity, while not for everyone, is still worth your consideration when you retire. Partnering with an annuity specialist will allow you to further examine these safe money alternatives to see if they will work in your particular situation.
If you would like to learn more about how women can use annuities to create a safer, healthier and more successful life after work, email me or call me, and I’ll be happy to help. send educational information to help you make the right decisions about your retirement plan.
Lyle Boss is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management. Boss Financial, 955 Chambers St., Suite 250, Ogden, UT 84403. Phone: 801-475-9400.
