Best Annuities for Retirement
Before we discuss the best type of annuity for retirement, we will briefly explain an annuity and who should pursue this type of financial planning. Annuities come in two types, immediate and deferred. The deferred plan is the best annuity for retirement because it pays significantly more since the insurance company you purchased the retirement annuity from has more time to invest with the funds you provided. An immediate annuity provides you monthly income right away.
Both types of annuities require you to invest a lump sum of cash to establish a stream of monthly income for a set time or for the remainder of your life. An annuity plan is often ideal for someone looking to build retirement income who has maxed out their contribution to an Individual Retirement Account (IRA) or a 401(k).
Which One is the Best Retirement Annuity for You?
You have three basic options when it comes to selecting a retirement annuity. The first is the equity-indexed annuity. The income you derive from this annuity for retirement depends on how well an index performs. The S & P 500 is a prime example. One benefit of an equity-indexed annuity is that it guarantees you a minimum interest rate even if the rate of the index is higher. Consumer Advocate lists these companies on its list of best retirement annuity provider:
- Allianz Life
- Blueprint Income
- Mass Mutual
- Pacific Life Insurance
A fixed annuity is similar to a pension. It pays you at a set rate regardless of changes in interest rates. The benefit here is that you know how much to expect while the drawback is that you could be earning more when interest rates are higher. Forbes currently lists these companies as offering the best fixed annuities:
- American National
- Atlantic Coast Life Insurance
- Delaware Life
- Oxford Life Insurance
The third class of annuities, variable annuities, are a specific type of mutual fund investment. This can be a bond, an investment in money markets, or both of these combined. Payment from this annuity will match the mutual fund’s current interest rate. In December 2018, WealthHow chose these companies as offering the best type of annuity for retirement:
- Allianz Life
- American Equity
- Athene Life
- Midland National
- Phoenix Life
Learn More About Your Retirement Annuity Options
At Fortified Retirement, we understand the above can be a lot of complex information to process. We invite you to contact us at 833-542-6300 or visit our resource center to learn more about your annuity options for retirement. We are here to help you feel confident in your decision.