What Is the Best Type of Annuity for Retirement?

The Annuity Man

Most retirees or pre-retirees are looking to move away from stock market fluctuations to guaranteed income or full principal protection.  Those 2 goals are what annuities primarily solve for. 

Annuities were first introduced in the Roman Times to provide lifetime income guarantees to the dutiful Roman soldiers and their families. With over 10,000 baby boomers retiring every single day, annuities can play a positive role in retirement planning by providing contractual guarantees and transferring risk.  There are only 2 questions to determine if you even need an annuity, and if so...what type.

1.  What do you want the money to CONTRACTUALLY do?  2.  When do you want those CONTRACTUAL guarantees to start?  From those 2 answers it is easy to determine if you need annuity, and the best type that contractually solves for your specific contractual goal.

Another thing that I have come up with to determine if an annuity is right for your retirement planning is the acronym P.I.L.L.  P stands for Principal Protection.  I stands for Income for Life.  L stands for Legacy (i.e. leaving money to your heirs and beneficiaries), and the other L stands for Long Term Care/Confinement Care.  If you don't need to contractually solve for one or more of the P.I.L.L., then you do not need an annuity.  In my opinion, annuities should never be purchased for market growth due to the limitations on those annuity types like Fixed Index Annuities (FIAs) and Variable Annuities (VAs).

You can contact Stan if you have any questions or want to see quotes on your specific situation.


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