In finance, the word “annuity” refers to a series of payments made to a person (called the “annuitant”) for life or for a set number of periods. In this post we refer to a fixed, life annuity, a plain vanilla annuity that will guarantee a set income each month for the rest of your life, no matter how long you live or what dumb mistakes you make along the way. If this guarantee looks familiar, it should, since it is pretty much what we get from Social Security as well as from a traditional “defined benefit” pension — if we are lucky enough to have one. Both are forms of life annuities because both pay until you die.
TREAT SOCIAL SECURITY AS INSURANCE AGAINST ONE OF LIFE’S MOST EXPENSIVE ACCIDENTS:
Failing to Die on Time
Virtually every economist who studies retirement issues feels that annuities are generally the best way to close a lifetime income gap. In fact, economists are very surprised that relatively few retirees choose to invest at least some of their savings in a life annuity. They even have a name for this strange behavior, which they call the “annuity puzzle.”
Read the entire PBS article HERE and contact my team for more information.
Matt Nelson, president
Income For Life LLC
877-284-8929 toll free
