When you break it down, saving for retirement is fairly straightforward: Set aside a portion of your earnings each year, invest for a long-term time horizon, be patient, and grow your wealth. While this is obviously an over simplification, saving for retirement – at least from an investment standpoint – is pretty simple.
It’s when you actually reach retirement and start drawing income from your savings that things start getting much more complex and uncertain. As such, retirees generally consider guaranteed income and safety of principal more important than average returns.
And it’s not just a preference of retirees – the research backs them up, too.
When it comes to generating what is often considered to be a “safe” income source in retirement, there are really three major ways:
Despite a somewhat negative perception, annuities have been shown time and time again by researchers to add significant value to a retiree’s financial security. Additionally, annuities often outperform the other two sources of safe income options in retirement.
Let’s look at a few ways research has shown annuities to be valuable.
Research conducted by John Ameriks, Robert Veres and Mark Warshawsky tested the sustainability of investment portfolios. Amazingly, their research found that when adding an immediate annuity into a retirement income portfolio, “for all time periods and for all portfolios, the addition of the annuity leads to a decline in the portfolio failure rates.”
Anil Vazirani is president of Secured Financial Solutions, independent insurance advisor investment advisor rep with a fiduciary obligation and in the financial services industry since 1994. A+ rating with the Better Business Bureau for over a decade and a half, members in good standing with the National Association of Insurance and Financial Advisors.
Dial 1-800-957-5604 x 200 and set up a complimentary strategy session to understand what your goals are, understand what objective you’re trying to accomplish, your risk tolerance, and let us show you how to reduce your investment fees from stocks, bonds and mutual funds down to one point, or five percent when you work with our investment advisory platform. Dial 1-800-957-5604 x 200, and on the web at: DreamRetire.com
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