Millions of Americans are looking for ways to guarantee an income during retirement and the guaranteed income annuity is one of the most popular options.
But before you sign up, it’s important to understand the potential risks involved. Join Chris Merchant, CFP® as he discusses risks you need to consider.
Guaranteed Income Annuity? Don’t Miss These Risks.
Have you ever thought about investing all of your retirement money in a guaranteed income annuity for your retirement?
Well, it’s a common path to creating retirement income. But, there are a few things you need to consider about the risks of this choice.
First, you generally give up control over your money in exchange for the guarantee of income. Once you purchase them, you typically cannot access your money without paying a penalty. So that means if something happens and you need the money sooner you might not be able to get to it.
Second, they typically do not address inflation. And your payments may stay the same, but if inflation rises the purchasing power of those payments will decline. And, that can erode the value of your retirement income.
So while they can provide a stream of payments that can last for the rest of your life, there are downsides to consider before making this type of investment.
Know that there are other methods that can be used for creating retirement income that might not expose you to those risks or limitations.
If you want to learn more about your options, enroll in our free Retirement Basecamp™ online course today.
📚 Enroll: Retirement Basecamp™