Retirement planning has always been a concern for people. But with the current economic situation and volatility of the market, traditional products just haven’t been performing as well as they once did. People of all ages, particularly those approaching retirement age, are getting more and more nervous about where their money is.
As noted in this recent article in USA Today, more and more advisors are recommending annuities as an option to assure guaranteed income. And with good reason:
“Fixed annuities have a guaranteed lifetime minimum interest rate, as well as a rate that fluctuates at regular intervals, usually annually. For example, the insurance company might offer an annuity with a 2% minimum lifetime interest rate, and a current rate of 4%…Brokers often suggest a fixed annuity as a substitute for a bank CD. You’ll get a higher interest rate from a fixed annuity than you would from a bank CD.”
However, it is important to be an informed consumer. As with all retirement planning products, there are costs that are associated with indexed annuities.
What questions do you make sure to ask when discussing your nest egg options?