In this video, we delve into the world of annuities, explaining why they are a perfect fit for your retirement plan.

Annuities might seem complex and are oftentimes misunderstood, but we’re here to simplify them for you.

It’s no secret that we use a 3-bucket approach to retirement income planning, and annuities fit in the income bucket, producing a guaranteed lifetime income stream that you cannot outlive.

You might wonder, why annuities are a good fit for the income bucket. The reason is that they require fewer assets compared to other methods.

The other benefit annuities offer retirees is the security of guaranteed lifetime income that you can’t outlive.
In the preservation and distribution phases of retirement, stability, and growth are important factors. Fixed Indexed Annuities bridge the gap, providing safety and the potential for earnings.

If you have questions about income in retirement, connect with one of our experienced professionals.

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Stephen Stricklin, President of Wise Wealth is joined by Marvin Musick, Co-Founder of the Medicare School.

The Medicare School is an independently owned and operated business, separate from Wise Wealth. Based to our shared values, beliefs, and educational philosophy, The Medicare School has selected Wise Wealth as its exclusive referral source for retirement and financial planning. Please note that The Medicare School exclusively provides Medicare education and product solutions and is not registered as an RIA….(read more)

LEARN MORE ABOUT: Retirement Annuities

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How Annuities Fit in Retirement Planning

When it comes to planning for retirement, there are many tools and strategies at our disposal. One such tool is an annuity, which can play a crucial role in securing our financial future. An annuity is essentially a contract between an individual and an insurance company, where the individual invests a sum of money in exchange for regular income payments.

One of the key benefits of including annuities in retirement planning is their ability to provide a guaranteed income stream. With the decline of traditional pension plans, annuities have become an attractive option for individuals looking for a reliable source of income during retirement. Annuities offer the peace of mind that comes with knowing you will receive a predetermined amount of money at regular intervals, regardless of market performance.

Another advantage of annuities is their tax-deferred growth potential. Unlike other retirement accounts such as 401(k)s or IRAs, annuities allow individuals to grow their investments without being subject to annual taxes on dividends, interests, or capital gains. This tax advantage can lead to significant savings over time, especially for individuals in higher tax brackets.

Furthermore, annuities can offer protection against market volatility. While other investments such as stocks or mutual funds are subject to market fluctuations, annuities provide a fixed or indexed rate of return. This stability can be attractive for retirees who are more focused on preserving their wealth rather than taking on additional risk.

Annuities also offer flexibility in terms of payout options. Individuals can choose to receive a fixed monthly or annual payment or opt for variable payments depending on their financial needs. This flexibility allows retirees to customize their income stream to align with their lifestyle and expenses.

However, it is important to note that annuities come with certain drawbacks as well. One major concern is that annuities tend to have higher fees compared to other investment vehicles. These fees cover the administrative costs and commissions associated with managing the annuity contract. Therefore, it is crucial to carefully evaluate the fees associated with different annuity options to ensure they align with your retirement goals.

Additionally, annuities may lack the potential for high returns that other investments such as stocks or real estate may offer. While the guaranteed income of annuities can be reassuring, it also means that individuals may miss out on potential market gains.

In conclusion, annuities can be a valuable tool in retirement planning, offering a guaranteed income stream, tax-deferred growth, and protection against market volatility. However, it is important to weigh the advantages and disadvantages of annuities and consider your individual financial situation before making any decisions. Consulting with a financial advisor can help you determine whether annuities are the right fit for your retirement goals and create a comprehensive retirement plan that meets your specific needs.