Are annuities a good retirement investment?
An annuity gives you the certainty of receiving an agreed-upon monthly income for the rest of your life, and for the life of your spouse in the case of a joint-and-survivor annuity. A fixed annuity pays a regular stream of income while you live. An immediate annuity is purchased with a lump sum and begins to generate income immediately. Annuities offer many payout options. Each one is guaranteed by the insurance company. Generally, the longer you obligate the company to pay benefits, the lower your monthly check. Each company determines its payout scale by estimating survival rates and the company’s expected earnings on investments. A variable annuity provides an alternative should you seek an investment with the potentially higher return of equities or to be more involved with the investment decisions. For example, the Vanguard Variable Annuity Plan offers these investment choices: Money Market Portfolio, High-Grade Bond Portfolio, Balanced Portfolio and Equity Index Portfolio. The in