My parents are getting close to retirement and I do think there is a case for an annuity regardless of how much one has saved for retirement. Being a professor, my father has his retirement plan with TIAA-CREF. Most of it is in mutual funds with some in the TIAA Traditional account. Regardless of where the funds come from, an annuity makes a great planning tool. I wouldn't advocate using all of your money to buy an annuity, buy some percentage.
My parents plan on putting enough of their retirement money into an annuity so that the last 7 years of their mortgage, taxes, insurance, utilities, health care and other household expenses are covered. This way their retirement doesn't depend on how the market performs. They can still live in the home they want to retire in. Should the market do well, then they can travel and do more things they want to do in retirement. Since thier house was purchased long ago the expenses really are a small part of thier expenses as a whole. As a percentage of assets for retirement, I believe they will only need to annuitize 35% of their portfolio.
To ensure they have what they need without market fluctuations, I believe this is a good way to go. Especially with a highly rates insurance company.
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