Are you planning to purchase an annuity to help ensure steady income during retirement? With fewer Americans able to access traditional pensions, more people are turning to annuities to fill the monthly gap of income that makes planning easier and safer.
But before you go out and buy your annuity, consider the benefits of purchasing multiple annuities rather than one large one. How can this help and protect you? Here are three key ways.
1. You Can Stagger Payments
When many people retire, they continue to have a lesser stream of income for a while. You may be reluctant to stop working entirely, for instance. You may be asked to continue as a consultant with your former employer or within the field. You may take up a money-making hobby. Or you may still have passive investments like rentals or dividends.
Whatever the reason, if that income provides a partial replacement for working, your retirement income needs may not be as high right now. If you purchase a small annuity to begin upon retirement with more kicking in later, you can stagger the payments to better fit your needs and goals.
2. You Reduce Risk
Certainly, your goal in choosing an annuity provider is to find a reliable, high-quality company. But no one can tell the future, and the entire goal of buying annuities is to reduce financial risk. So, when you choose more than one provider, you mitigate any potential danger of losing money and increase your chances of finding the best annuity companies to work with.
3. You Have More Options
Annuities bring many options for modern investors. You can choose an immediate annuity or delay the start date. You can opt for lifetime benefits or a fixed term. You can include your spouse or choose not to. If you think that more than one option in any given situation might be good for you, multiple contracts provide that flexibility.
For example, buying lifetime benefits reduces the risk of outliving your money but comes with lower payments. You can have the best of both worlds, though, if you have one lifetime policy and one fixed term. This way, you get both higher monthly benefits now and insurance against running out of funds later in life.
As a wise investor, you know the value of looking at the pros and cons of all financial choices. And the purchase of multiple annuity streams is one choice that deserves serious consideration. Want to learn more about annuities? Start by meeting with an annuity provider today.Share
19 March 2020
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