In today’s retirement world the old rules of thumb like the 4% rule, where you can withdraw up to 4% of your portfolio as income annually and avoid burning through your assets are out the window. A recent article picked up by Yahoo Finance highlights this point. The article talks about how since 2008 the ideals of retirement planning have changed and the use of annuities to help supplement retirement income is a practice that has increased significantly. There are different types of annuities and there is no one annuity for every retiree out there. Therefore, contacting a retirement advisor or annuity expert prior to purchasing an annuity is vital to avoiding a retirement planning mistake. Immediate annuities may be right for someone who is retired or will retire in a year or two, whereas for someone 10 years away from retirement age a variable or fixed indexed annuity might be ideal. Fixed indexed annuities have gained in popularity due to their ability to provide gains when the market is up and protect against loss when the market dips all while providing a guaranteed lifetime income benefit in some cases.
To read more about effective retirement income planning and how to use annuities to assist a retirement strategy, visit the Retirement Think Tank.
To read the article on annuities, click here.