Top Retirement Annuities for Secure Future Planning

Explore the best retirement annuities suitable for secure financial planning. This guide reviews types, key considerations, top providers, and timing to help you make informed decisions for a comfortable retirement. Understand benefits, drawbacks, and expert tips to maximize your investment in annuities tailored to your needs.

Top Retirement Annuities for Secure Future Planning

Choosing the Best Retirement Annuities

Annuities are financial products where an individual invests a lump sum to receive guaranteed payouts over time. Immediate annuities begin payments instantly, while deferred annuities start paying after a delay. Deferred options typically offer higher returns because insurers have more time to grow your investment.

It’s often said that annuities are sold, not bought, and are considered costly. They become especially valuable as pension coverage diminishes, making careful research crucial before committing.

Finding quality annuities requires thorough investigation due to their expense. In this article, we explore everything you need to know about annuities and highlight top options for retirement savings.

Important considerations before purchasing a retirement annuity:

Buy during periods of high interest rates to maximize benefits. Purchasing when rates are low may reduce your returns.

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

When agreeing to a contract, watch for terms like “surrender charges” and “withdrawal rates,” and understand them fully. Remember, annuities are not inheritable assets; transferring them to heirs or charities usually incurs high costs.

Types of annuities:

Immediate annuities: Payments begin immediately post-investment, but generally provide lower returns than deferred options.

Deferred annuities: Funds are invested for a set period, after which withdrawals can commence, potentially offering higher gains.

Ideal candidates for annuities:

Individuals who have contributed the maximum to their 401(k) or IRA and seek additional retirement income options.

No limit on the amount you can invest in an annuity.

Top recommended retirement annuities:

Fixed-rate options include Sentinel Security Life, Colorado Bankers, Minnesota Life, and North American.

Leading immediate annuities of 2018 feature Minnesota Life, Integrity Life, and Nationwide.

Best deferred annuities for 2018 come from Mutual of Omaha, New York Life, and Lincoln Financial Group.

For low-minimum income deferred annuities in 2018, consider Guardian Life, MassMutual, Principal Financial Group, and Blueprint Income.

When is the best time to invest in an annuity?

While they are beneficial, annuities shouldn’t be your immediate priority. Prioritize contributions to accounts offering matching or tax advantages first.

Once you've maxed out other retirement accounts—aiming for at least 15% of gross income—consider investing in annuities.

Benefits of investing in annuities:

Provides a steady income stream for life.

Offers tax-deferred growth until withdrawal.

Fixed annuities shield you from market volatility with predictable returns.

Potential drawbacks of annuities:

Generally more expensive than mutual funds.

Surrender fees can be substantial.

The complexity of terms can make understanding them challenging.