Category: Dividend
Is an Annuity the Right Retirement Option for You?
Annuities can be great tools. Often, fixed annuities can offer higher interest rates than your bank account, a CD, or even Treasury Bonds, and they do it all with comparatively low risk. But, there are many alternatives that may be far better options for some people. One of the downsides to some annuities is that your portfolio can’t grow if you’re taking the interest as distributions, and there can be surrender charges as well. The 65-year-old retiree will see the value of his or her $500,000 stay the same over 10 years, and if you factor in an annual inflation rate of 3%, your purchasing power for that same $500,0000 will only buy $350,000 worth of goods. If that scenario doesn’t seem ideal for you, here are a few alternatives you might consider. Dividend-paying stocks that pay monthly and quarterly dividends can be good annuity alternatives. With the help of an experienced advisor, you may be able to even buy a collection of dividend-paying stocks that will not only pay you more income every year, but even offer the possibility of making your investments grow. Keep in mind, however, that there will be more risk. It’s important to have someone help you choose a diversified, broad portfolio of stocks. Diversification can help ensure that, even as some stocks may decrease in value, they will hopefully be offset by other stocks that are rising in value. This also means that you’ll be less likely to be forced to sell, because even if the
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