Reasons To Consider an Annuity for Retirement Planning

U.S. Labor department data released in August of 2022 revealed that the annual inflation rate for the year ending in July 2022 was 8.5%, the highest since November 1981. If you’re in the middle of planning for retirement, this development—plus the current speculation about a later recession—might be unsettling news.

But it doesn’t have to be that way. Remember that diversification is key to retirement planning. The basic design of a retirement portfolio should include a solid base of lower-risk financial products to help provide ballast to your retirement portfolio during more difficult economic periods.

That’s where an annuity for retirement comes in. Fixed annuities offer steady, guaranteed interest rates that can help provide stability to a retirement portfolio.

As far as a recession goes, your annuity payments won’t be affected by an economic downturn since a fixed annuity for retirement doesn’t change because of developments in the broader economy.

As a lower-risk financial product, a retirement annuity offers many advantages that make it an attractive option for a retirement portfolio.

Guaranteed income

Since we’re generally living longer than previous generations, it’s a good idea to have a source of income that doesn’t run out. A guaranteed-income annuity for retirement can provide an income from your savings for as long as you (or you and your spouse) live.

Flexible income payment

As an owner of a guaranteed-income retirement annuity, you can customize how often you’re paid, set your payout so it increases to offset inflation and much more.

Tax deferral income

Tax on the earnings of an annuity is generally deferred until withdrawal, allowing your money to accumulate faster because it grows in three ways: your premiums earn interest, your interest earns interest, and the taxes you would have paid are deferred to a time when you typically have less income and a lower tax rate.

AAA Life Insurance Company and its agents do not provide legal, tax or financial advice. Please consult your professional advisor prior to the purchase of any policy or contract. Life insurance underwritten and annuities offered by our affiliate, AAA Life Insurance Company, Livonia, MI. AAA Life is licensed in all states except NY. Products and features may vary by state. The California Certificate of Authority number is 07861. ALAN-28520-O22-XX.