Are Annuities A Good Investment

Why they can be the right thing for some investors.

Are annuities a good investment. On the one hand interest rates have declined since 2000 which would increase the value of an annuity. Annuities are good investments if you are buying them for the right reasons. For example a fixed annuity might make an attractive alternative to a certificate of deposit CD.

Living on social security is tricky if not impossible. In that situation an annuity payout can. Like any financial instrument annuities play a specific role in an investment portfolio and deciding whether an annuity is a good investment for you requires sound financial planning and clear goals.

Here are five of the pros of annuities. In this whiteboard animation video we look at annuities to see if annuities are good investments. When most people think of investing they conjure images of Wall Street and the high-stakes energy of the New York Stock Exchange trading floor.

Variable Annuities Fixed annuities guarantee a specific interest rate on money invested in the contract with the insurance company choosing and managing the investments. And an immediate annuity is bought for income purposes. You can buy annuities for safety long-term growth or income.

Well but thats the smart way to do it. Annuities are a favored investment vehicle for many retirees or near-retirees. To cut a long story short if inflation hits a consistent 3 per annum or even 2 the average retirees purchasing power will erode by 117000 and 74000 over 20 years respectively LIMRA 2016 study.

For some people an annuity is a good option because it can provide regular payments tax benefits and a potential death benefit. Are annuities so bad. For some theres a risk of outliving your retirement savings.