“This Puts A Smile On My Face”

"My husband and I invested a good sized chunk of our savings in two annuities in 2009. Both of these annuities have a benefit that pays us an income for as long as either of us lives.

The annuity returns have been ok, but the growth of the income has been amazing. We now have a guaranteed retirement income of over $100,000. Just writing that puts a smile on my face.

I don’t think many people invest in these kinds of annuities. Maybe you can explain them to your audience. I know my son listens and I’m hoping he’ll listen to you since he rarely listens to me."

I am very familiar with the annuity plans you and your husband own. And you are correct that they can provide exceptional retirement income guarantees. And I am happy to give everyone a little insight. It’s the part about your son that I’m not sure about.

For folks looking for the combination of strong guaranteed retirement income, investment flexibility, and the opportunity to provide funds for their beneficiaries – variable annuities with guaranteed income riders might fit the bill quite nicely. These annuity platforms are offered by a number of companies. The company you choose is very important. The guarantees (some that you hope will be in place for decades to come) are only as good as the company standing behind them.

These annuities allow you (hopefully with your financial advisor) to select from a wide array of investment options to craft a tax-deferred investment portfolio that best fits you. Then you can choose to add (by rider at an additional cost) guaranteed retirement income. In these uncertain times many people find it quite comforting to secure guaranteed income that will be there even if the investment markets take a dive.

Of course, this is just the briefest of descriptions. For those who are interested in exploring these options they should take their time and learn the pros and cons of the annuities they are considering. Of course, our More than Money advisors are always available to assist you in exploring, evaluating, and implementing a program that fits.

As for you son – these might be right for him. They might not be right for him. It depends on many factors that (almost certainly) are different for him than they are for you and your husband. I will be happy to talk to him and help him explore and identify the options that are right for him.

Gene answers your neighbors financial questions on More than Money.

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