Here at Income For Life, we like to pride ourselves on being experts at common sense retirement planning in Topeka. In our last blog, we began speaking about some common myths surrounding fixed indexed annuities. The fixed index annuity combines tax deferral and the potential for interest based on positive changes of an external index without actual participation in the market. Should you include a fixed index annuity in your financial plan? Today we’ll cover some more myths to separate truth from fiction.
- Myth: Annuities are too complex for the average person to understand. Fact: An annuity is simply a contract you make with an insurance company get financial benefits in the future, such as during retirement. When you buy a fixed indexed annuity, you set aside some of your retirement savings in return for a future stream of income from that pool of money.
- Myth: If you die you’ll lose the balance of an annuity. Fact: Actually, fixed indexed annuities can allow you to pass the money in your annuity to one or more named beneficiaries after your death. You can even choose to set up your annuity as “joint life” in order to provide you and your spouse guaranteed income for life, no matter how long each of you live.
- Myth: Annuities are only good choices for older investors. Fact: The truth is, no matter your age, an annuity can be a smart way to diversify your financial portfolio. In fact, having a portion of your assets in a fixed indexed annuity can provide balance and stability for your retirement.