If you’ve ever worried about outliving your retirement savings, you’re not alone.
In a 2021 study of retirement insecurity, 58% of Americans said it’s only getting harder to prepare for retirement, and 51% cited fewer pensions as a contributing factor to this problem.1
With pension offerings on the decline, you may want to consider a fixed income component to your financial strategy. In short, adding an annuity may be an opportunity to help ensure a portion of your retirement income will be guaranteed.
What is an annuity?
An annuity is a contract you purchase from an insurance company. For the premium you pay, you receive certain fixed and/or variable interest crediting options able to compound tax deferred until withdrawn. When you are ready to receive income distributions, this vehicle offers a variety of guaranteed payout options — some even for life.
Most annuities have provisions that allow you to withdraw a percentage of the value of the contract each year up to a certain limit. However, withdrawals will reduce the contract value and the value of any protected benefits. Excess withdrawals above the restricted limit typically incur “surrender charges” within the first five to 15 years of the contract. Because annuities are designed as long-term retirement income vehicles, withdrawals made before age 59 ½ are subject to a 10 percent penalty fee, and all withdrawals may be subject to income taxes.
¹ National Institute on Retirement Security. February 2021. Page 7. "Retirement Insecurity 2021: Americans' Views of Retirement." Accessed March 15, 2023.
Insurance products are offered through the insurance business Scott Tucker Solution, Inc. Scott Tucker Solution, Inc is also an Investment Advisory practice that offers products and services through AE Wealth Management, LLC (AEWM), a Registered Investment Advisor. AEWM does not offer insurance products. The insurance products offered by Scott Tucker Solution, Inc are not subject to Investment Advisor requirements.
Have Questions for Scott Tucker Solutions?
It can be difficult to make financial decisions without access to information. If you have questions or concerns about your current retirement strategy, feel free to contact us using the form below.
Get instant access to our Retirement Planning Kit
Our helpful retirement kit includes 3 guides that address topics you should consider when planning your retirement. Enter your information to get your guides!