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Annuities may stretch retirement income 2010-04-27 As life expectancies continue to rise, Americans concerned with making retirement income last may consider investing in an annuity. Annuities are a good way to supplement income from savings and Social Security benefits, and retirees may take comfort in knowing they will be receiving a monthly payment regularly. Immediate annuities allow individuals to invest a lump sum and receive monthly payments at a later date for the remainder of their lives. Immediate annuities are attractive because each monthly check pays out a portion of the principal as well as interest, according to Kiplinger. Because fixed annuities may lose purchasing power over long periods of time, individuals may want to consider investing a portion of their income into an immediate annuity and purchasing an additional annuity at a later date when interest rates are higher, Kiplinger reports. Americans approaching retirement may benefit from investing in a deferred variable annuity, which invests in a diversified pool of funds but guarantees a minimum payout regardless of how the investment performs, reports Kiplinger. Many retirees use various investment tools to build and maintain their retirement income. Retirees should explore the different annuity options before deciding if investing is the right retirement choice for them.  |
