• 2-Minute Article
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  • Oct 15, 2017

5 Reasons You May Need an Annuity

Discover how an annuity can help you protect and grow your retirement savings.

Updated: November 30, 2022

Questions this article can help you answer:
  • How could I make my portfolio more tax efficient?
  • What are the benefits of an annuity?
  • When can I withdraw from an annuity?

An annuity can help you protect and grow your retirement savings so that you can do more of what you love in retirement. Here are five reasons why an annuity may be a beneficial part of your plan for retirement:

1. Annuities can provide guaranteed, predictable income

These days, people are living longer. The number of people age 85 and older is projected to triple from about 6 million people in 2020 to 19 million by 2060.1 This means your retirement could last over 20 years.

This also means your money needs to last longer.

Traditional retirement strategies may not be enough. So even though you’ve diligently saved for retirement, and Social Security benefits are available to you, you may want to consider another source of income you can count on, like an annuity.

2. You can choose when to begin receiving income

With annuities, you can decide when you want to begin receiving income, and most don’t even make you decide in advance. Whether you need income today or sometime in the future – you can determine what’s best for you.

3. Fixed annuities can provide stability for your overall portfolio

With most fixed annuities, you can count on getting out what you put in – sometimes even more. That kind of predictability helps balance your other investments that may be more sensitive to market swings. No matter how the stock and bond markets perform, you’ll typically receive at least a minimum return from a fixed annuity in your portfolio.


4. Deferred annuities can make your portfolio more tax efficient

Many investments require you to pay taxes each year on what you earn, so you’re not really earning as much annually as you might think. However, with deferred annuities, you’ll only be taxed on the growth when you take out money in the future.

Having an additional tax-deferred investment in your portfolio means you can help minimize the taxes you pay each year.

5. You can customize annuities based on your financial goals and needs

Annuities are not one-size-fits-all. There are a variety of options to consider – ranging from products that focus on growth potential to products that offer steady, guaranteed future income. Work with a financial professional to find out if there’s an annuity that fits your needs.