An Easy Way to Boost Your Retirement Income

Many retirees did everything they were supposed to do: They worked hard, saved their money, and retired with what they believed to be a comfortable amount of savings in their retirement funds. Planning to live off of the interest, they happily made plans and settled into their new way of life.

But after a few years, these retirees found that their budgets did not accommodate their expected lifestyles. Inflation, the rising cost of health care, and other expenses drained their bank accounts each month. There isn’t much left over after paying the bills.

If you’re one of those retirees, and you’re looking for a way to boost your income, you’ll be happy to know that we have ways of doing that.

In exchange for a lump-sum payment now, you can enjoy guaranteed income for life through an annuity. That can be a valuable asset when you consider the fact that people retiring today can expect to live 20 or 30 more years.

Of course, you should consider the fact that an annuity is an illiquid asset. That means it’s difficult to get cash out of it in the event of a major financial emergency. Another thing to consider is the “opportunity lost” of purchasing an annuity. If you invest $250,000 in an annuity, that is $250,000 dollars you can’t invest in another asset which might perform better in terms of high returns.

But since there are over 1,600 different kinds of annuities on the market, each with their own fees, benefits, and drawbacks, it pays to work closely with your financial planner to choose the annuity that meets your needs. Weigh the benefits and drawbacks of any annuity you are considering. In many cases an annuity can comprise a valuable part of a diversified portfolio.