It’s a conundrum faced by some pre-retirees: Full-time work soon will be behind them and they’ll need income, yet they want to delay tapping Social Security for as long as possible to maximize those benefits.
For people who have other assets available, some advisors recommend that, rather than gradually withdrawing from those funds — such as an individual retirement account, 401(k), pension, brokerage, savings, etc. — they instead shift some of the money to a single premium immediate annuity to get them through that gap in income.
“It’s certainly a valid option,” said certified financial planner Ronald Myers, a managing member at Fortune 360 Group in Plantation, Florida. “But is a good option? That’s a different question.”
Annuities, which offer varying levels of guaranteed income either for a set time period or for life, come in a variety of packages and can often be tricky to understand and more expensive than other options.
Yet SPIAs, as they’re called, generally are more straightforward than their brethren. They make up a fraction of annuities sold yearly — just $9.7 billion of $233.7 billion last year, according to the LIMRA Secure Retirement Institute.
For people who have other assets available, some advisors recommend that, rather than gradually withdrawing from those funds — such as an individual retirement account, 401(k), pension, brokerage, savings, etc. — they instead shift some of the money to a single premium immediate annuity to get them through that gap in income.
“It’s certainly a valid option,” said certified financial planner Ronald Myers, a managing member at Fortune 360 Group in Plantation, Florida. “But is a good option? That’s a different question.”
Annuities, which offer varying levels of guaranteed income either for a set time period or for life, come in a variety of packages and can often be tricky to understand and more expensive than other options.
Yet SPIAs, as they’re called, generally are more straightforward than their brethren. They make up a fraction of annuities sold yearly — just $9.7 billion of $233.7 billion last year, according to the LIMRA Secure Retirement Institute.
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