Q. I plan to spend some money on an annuity product, is it a good idea?
A. If you expect to have a healthy long retirement life, it is a good idea to own an annuity product.
An annuity is like a life insurance product, if you die early, you can leave some money to your beneficiaries; if you live very long (longer than you planned), it can provide a perpetual lifetime income, just like a private pension.
But don't spend all your retirement money on annuity, you need to diversify - allocate a portion of your 401(k) money to annuity. Also, don't treat annuity like an investment, instead, treat it as a secure source of retirement income. From this sense, don't forget to add an inflation rider - so your annuity payment will grow with inflation during your retirement time.
Next blog post, we will briefly discuss how much annuity to purchase.
A. If you expect to have a healthy long retirement life, it is a good idea to own an annuity product.
An annuity is like a life insurance product, if you die early, you can leave some money to your beneficiaries; if you live very long (longer than you planned), it can provide a perpetual lifetime income, just like a private pension.
But don't spend all your retirement money on annuity, you need to diversify - allocate a portion of your 401(k) money to annuity. Also, don't treat annuity like an investment, instead, treat it as a secure source of retirement income. From this sense, don't forget to add an inflation rider - so your annuity payment will grow with inflation during your retirement time.
Next blog post, we will briefly discuss how much annuity to purchase.
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