Washington Insurance – Is Annuity Best For Me?
Reader’s Question:
I’ve been getting mixed advice on annuities. My father thinks they are great. My brother likes other forms of investment. Who’s right?
Myles
Spokane, WA
Good news Myles,
Both your dad and brother right. Your investment portfolio should be as diversified as possible. Your brother sounds like he leans toward risk-return type funds. Your father likes annuities as one of the items that should be in a balanced portfolio. Classify your investments and determine your comfort level on percentage basis. Invest within those percentage parameters.
Fixed annuities are investments whose values are guaranteed not to decrease. Usually the value will increase at a pre-determined interest rate. Every portfolio can use an annuity investment like that. You can set your payments to begin at your retirement age.
Keogh accounts, 401k’s and 403b’s are staple investments, but you can only invest so much. Annuities will supplement these and your social security as you enter retirement. Annuity investments usually provide a better shield against inflation.
The ideal portfolio should also include some of the aggressive investments, which your brother suggests. We think annuities are a stable safety-net and a good source of tax-deferred income. Meet with your financial planner or your insurance agent and set your long-term goals. Then, you have to start and go for it!