Annuitization Versus Deferred Annuities in Retirement

Secure Your Retirement

In this Episode of the Secure Your Retirement Podcast, Radon and Murs discuss the concept of annuitization and immediate annuities versus deferred annuities. Annuities can come from different sources, such as insurance companies or municipal pensions.

Listen in to learn how immediate annuities work, their pros and cons, and risks such as the potential loss of the principal if the annuitant dies early. You will also learn how deferred annuities work, the fixed type of deferred annuities, and why they make more sense for retirement planning than immediate annuities.

In this episode, find out:

• The concept of annuitization and immediate annuities versus deferred annuities in retirement planning.
• Understanding that annuities can originate from insurance companies or pension plans.
• Annuitization – converting a lump sum into an income stream, plus the implications of this conversion.
• Various protections that can be added to immediate annuities, such as joint annuitization and period certain annuities.
• How deferred annuities allow the principal to grow over time before withdrawals begin.
• Fixed deferred annuities – guarantees the principal and offer growth linked to market indices without market risk.
• The financial suitability of immediate versus deferred annuities for different types of savers.

Tweetable Quotes:

• “You want to be very careful about using the word annuitization because sometimes people are receiving income thinking it’s annuitization and it’s truly not.”- Murs Tariq.
• “If you’re a good saver who’s saved a good amount of money, it’s probably not going to make the best financial decision to do an immediate annuity.”- Radon Stancil.
• "Should a person put all their money into an annuity? Absolutely not. Not in our opinion. But should they consider an annuity? Possibly."- Radon Stancil

Resources:

If you are in or nearing retirement and you want to gain clarity on what questions you should be asking, learn what the biggest retirement myths are, and identify what you can do to achieve peace of mind for your retirement, get started today by requesting our complimentary video course, Four Steps to Secure Your Retirement!

To access the course, simply visit POMWealth.net/podcast.