News Resources for Seniors

Benefits of annuities in retirement

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Americans are living longer and longer each year, making money a top concern among retirees. If a couple planned to have enough money to live off of until they were both 80, but they lived to be 95, there would be 15 years during which all they would have is Social Security.

The Employee Benefit Research Institute found that 64 percent of workers who earn less than $30,000 a year will run out of money within the first ten years of retirement. People tend to have more money when they are older, allowing for better opportunities to put funds into lump sum investments, according to the Annuity News Journal.

Many financial advisers recommend putting money into an annuity because it can guarantee a payout for the remainder of a person's life. These investments accumulate tax free and beneficiaries are not taxed on the funds until they start receiving payouts, the news source reports.

Annuities typically do not require a contribution amount every year, unless specified by the financial institution. However, experts recommend only investing in an annuity for retirement purposes because there can be a number of fees associated with early withdrawal.  

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