In times of wild market swings and low-interest rates from Treasurys, CDs, and other fixed-interest assets, annuities can bring a sense of calm and predictability to a portfolio. Many people refer to annuities as "retirement annuities," because they are particularly well-designed for retirement goals.
Annuities are the only instrument capable of paying you a guaranteed income stream for as long as you live. No other instrument on the planet offers this.
You can think of this in terms of a monthly paycheck or money for life. You will receive a check in the mail from the life insurance company that you can count on, again and again, for the rest of your lifetime.
That is no matter how equity markets perform. Annuity income can therefore be seen as a kind of "private pension."
Speaking in an analogy, you already have your own annuity with Social Security payments. You paid into Social Security's coffers during your career. Then, when retired, you receive a monthly income that pays you like clockwork.
Annuities work in much the same way. They can be a great supplement to the assured income you will receive from your Social Security payouts.
Depending upon your overall goals, annuities can also help you reach your objectives with other contract features as well. Here's a look at why retirement annuities can bring predictability to your lifestyle and stability to your portfolio.
