Experts recommend seniors to put their money in something safe, with minimum guarantees. For example, Certificates of Deposits, annuities or bonds. Now, there are select groups who can afford to play the game of risk that the market entails, but for most seniors living on a restrictive budget, playing the risk game should be avoided.
Investing in stock has its place in the financial arena. The main reason retirees invest in stock is to hopefully get a huge return on their money and to outpace inflation.
Seniors have a valid concern when comes to inflation. However, there are ways to outpace inflation, without taking chances in the stock market.
This is where the Indexed Annuity comes in. Indexed Annuities are one of the few investment vehicles that can hedge inflation. Unlike CDs, bonds and money markets, indexed annuities have the potential for stock market type returns without the market risk. Seniors need safety, and all investing should be done prudently and cautiously. Indexed annuities can not only help you grow what you have saved, they can help you protect your savings as well.
Many seniors are concerned about how inflation could reduce the value of their savings, giving them less buying power in the long term. By investing into an indexed annuity, they have the potential of outpacing inflation, thus keeping the buying power intact.
Plus, there are two other benefits for using an indexed annuity, rather than investing in risky stocks:
No-loss provision: Possibly one of the most-attractive provisions of an indexed annuity is the no-loss provision. This means that once a premium payment has been made or interest has been credited to the account, the account value will never go below that amount. This provides safety against any market volatility.
Interest guarantees: Another benefit that appeals to many people is the interest guarantee. Most policies have a cap (maximum interest rate that can be credited to a policy in a specific period) and a base (the minimum interest rate that can be credited in a policy year). The cap rate can vary from no cap to a fixed percentage, but the base is generally zero. This allows the policyholder to benefit from potentially high returns and be guaranteed at the same time, that no money will be lost.
Let’s sum up why annuities are good.
- Annuities can keep you from outliving your assets. As a general rule, it is easy to underestimate how long one will live, especially because we are living longer. Annuities have been able to help an entire generation stay out of poverty.
- Annuities are flexible and can be arranged to meet your individual needs.
- Annuities are secure.
- Annuities do exactly what they say. They are a contract. There can be no mistake, you know exactly what you will get and when.
- Annuities are one of the only guarantees that you can get in life. You can receive a continuing payment that will last a lifetime, so that you will never outlive your assets.
Contact our office to learn more about how an indexed annuity can fit into your portfolio.
by Holly Peterson | Oct 17, 2017
Author: Holly Peterson
Source: Bradenton.com
Retrieved from: www.idahostatejournal.com
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