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How Much to Invest In Annuities for Retirement?

January 26, 2008

There are no limits on the amount that you can invest in an annuity to ensure your comfortable retirement income. Annuities thus complement to 401(k) or an IRA,investments, which do have such limits.

You can opt for a deferred or immediate annuity.
In either case, how much to invest in annuities depends on 3 factors:

  1. Your immediate actual and potential financial needs
  2. Your long-term financial goals
  3. Your current savings/investment portfolio

The most important factor is your immediate actual and potential financial needs. If you have a sudden need for cash while you have a deferred annuity, usually, you can take out a limited amount of money without having to pay a penalty. In contrast, if you make a large withdrawal within a few years after you’ve taken out the annuity, it is likely that you will have to pay a penalty.

When you’re buying an immediate annuity, you usually can’t get any more than the regular payments, no matter how badly you need cash.

If, however, you are lucky enough to have other sources of cash for emergencies, you can use the criteria of your long term financial goals, current savings & investment portfolio to determine how much to invest in annuities.

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Written by Be Safe Insure · Filed Under Annuities, Insurance Trends, Retirement 

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