Most of the Americans, post retirement worry about running out of money, or not having enough savings to maintain the kind of lifestyle which they had lived for the major part of their life or the kind of life they have planned after retirement. In addition to social security benefits and pensions, annuities are one of the few retirement options that can provide guaranteed income for your lifetime. You should know why it is essential.
An annuity is a contract between you and an insurance company. You make an investment in the annuity,and in return the insurance company agrees to make a series of payments or in a lump sum beginning on a future date. The income you receive from an annuity can be paid out for a specified period or rest of your life.
So if one contributes to annuities during his/her working years, it would be very beneficial in building a retirement savings portfolio. Income from an annuity can help supplement Social Security and can provide income long after other savings run out.
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It can serve as longevity insurance. Knowing that you have income for life after you retire, no matter how long you live, can instill confidence.
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But before you buy annuity, make sure that you choose what suits you the best. It’s recommended to give a little time to research about annuities.