Are annuities safe for retirement?
The Annuity Man
Annuities were developed in the Roman Times as pension guarantees for the dutiful Roman soldiers and their families. That first annuity type is now called a Single Premium Immediate Annuity (SPIA), and has been sold in the United States for hundreds of years.
There are many different annuity types, but most solve for income. The unique benefit proposition that only annuities can provide is a transfer of risk solution for lifetime income. Annuities will pay regardless of how long you live. In other words, there's no ROI (Return on Investment) until you die.
Annuities primarily solve for 4 things. The easy to remember acronym is P.I.L.L. P stands for principal protection. I stands for income for life. L stands for legacy. The other L stands for long term care. If you don't need to contractually solve for one or more of those 4 items, then you don't need an annuity. It's really that simple.
So in retirement, annuities safe and contractually guaranteed transfer of risk strategies. They are peace of mind products. They are lifestyle products, and should always be owned for what they "Will Do.", not what they "might do." In other words, own them solely for their contractual guarantees.
Ask and answer 2 questions when it comes to annuities. 1) What do you want the money to contractually do? 2) When do you want those contractual guarantees to start? From those 2 answers, you can choose the right annuity type to contrachieve that goal.
You can contact Stan if you have any questions or want to see quotes on your specific situation or to see a live feed of the best MYGA fixed rates for your state of residence.