Annuities can be an important part of a senior’s financial portfolio. They can provide an avenue for developing tax-deferred savings. You can later use these funds to handle retirement costs, including everyday living expenses, healthcare, or other needs. They also offer a lot of flexibility, giving seniors the ability to choose those best suited for their unique needs. It’s impossible to say that one annuity is best for all seniors, but there are a few things to consider when selecting one.
Choose One Designed for Your Needs
What are your specific goals and needs for an annuity? Some may be a good choice because they allow for unlimited annual contributions, a key consideration for seniors who have already maxed out contributions to their IRA or 401(k).
Learn the Contract Details
Another key factor in selecting annuities for seniors is learning the details of any contract you are agreeing to. Learn the details such as any fees associated with it, surrender charges associated with it (depending on where you are securing it), and the overall value of the annuity. Read all the details about cashing in the annuity, in case you need immediate cash.
Consider Your Goals
Sometimes, seniors purchase annuities with the hopes of leaving funds behind for their loved ones. In all cases, you should know what happens to the funds if you die with it in place. You may be able to pay a fee with some forms that allow your beneficiary to keep receiving payments on it if you die while it is in place.
Know the Types
It’s important to look at the key factors that make annuities different from each other. Here’s a closer look:
- Fixed annuities have a preset and guaranteed value. They carry lower risk and tend to be a more stable option for seniors as a result. They are predictable.
- A variable annuity is another popular style. This one’s value is dependent on the way an investment portfolio performs. The risk is higher, but the reward is potentially higher as well.
- An indexed annuity offers a preset minimum but does change with the market. There’s a moderate level of risk since the reward does not drop below a set level.
Are you considering the value of adding an annuity to your portfolio? If you’re a senior, take a closer look at the opportunities available to you through Sterling Financial. Our team is here to help you make wise decisions for your financial future.