Discover the best retirement annuities to secure your financial future. This guide covers types, benefits, and key considerations to help you make informed decisions. Whether opting for fixed or deferred options, learn how to maximize your retirement savings with expert insights.

Top Retirement Annuities for a Secure Future

Selecting the Optimal Retirement Annuities

Annuities are financial instruments where individuals invest a lump sum to receive guaranteed income over time. Immediate annuities start payments right away, whereas deferred annuities kick in after a delay. Usually, deferred options provide higher returns due to the extended growth period for your investment.

It's often said that annuities are sold rather than purchased, and they can be costly. They become particularly important as traditional pension plans decline, so thorough research is essential before making a decision.

Choosing quality annuities requires careful analysis due to their expenses. This guide covers key facts about annuities and highlights top choices for retirement savings.

Key factors to consider before buying a retirement annuity:

Purchase when interest rates are high to maximize benefits. Buying during low-rate periods may reduce gains.

You can transfer funds from 401(k) or IRA accounts into annuities.

When entering an agreement, pay attention to terms such as “surrender charges” and “withdrawal rates” to fully understand their implications. Keep in mind, annuities are typically not inheritable; transferring them to heirs or charities can involve significant costs.

Types of annuities:

Immediate annuities: Payments start right after investment, generally offering lower returns than deferred options.

Deferred annuities: Investments grow over a set period before withdrawals begin, often resulting in higher accumulated gains.

Best candidates for annuities:

Those who have maximized contributions to their 401(k) or IRA and want additional income sources for retirement.

There are no limits on how much you can invest in an annuity.

Top recommended retirement annuities:

For fixed-rate options: Sentinel Security Life, Colorado Bankers, Minnesota Life, North American.

Leading immediate annuities of 2018 include Minnesota Life, Integrity Life, Nationwide.

Top deferred annuities in 2018 come from Mutual of Omaha, New York Life, Lincoln Financial.

Low-minimum income deferred options for 2018 feature Guardian Life, MassMutual, Principal Financial Group, Blueprint Income.

Ideal time to invest in an annuity:

While beneficial, annuities shouldn't be your first priority. Focus initially on accounts with matching contributions or tax benefits.

After maximizing contributions and reaching at least 15% of gross income, consider adding annuities.

Advantages of investing in annuities:

Provides lifelong steady income.

Tax-deferred growth until withdrawal.

Fixed annuities offer protection from market fluctuations with predictable returns.

Potential disadvantages:

Costlier than mutual funds generally.

Surrender fees can be significant.

The complex terms can make understanding them difficult.