Annuities Provide a Monthly Income for Life

Retirees do not have to fear about running out of money.

By Ivon T Hughes
income guaranteed for life
Figure 1. Income Guaranteed for Life

Guaranteed monthly income for life

Life annuities provide retirees with a guaranteed monthly income for life. With them, senior citizens don’t have to worry about investments or having their money run out at any point in time. Even if they live to be a hundred years old, the annuity will keep paying out and the payments only cease on their death. Therefore, it can be said that life annuities are among the foremost options for people planning their retirement. Yet, for some reason, seniors are not inclined towards purchasing annuities; rather they prefer exploring all their options, which include stocks, bonds and certificates.

Annuities offer a perfect solution

The main reason behind their attitude towards annuities is the general perception linked to this investment option. As witnessed in the recession, people who had money tied up in stocks and other financial markets saw their savings go down the drain. This is a major reason why people are forced to spend their old age in relative poverty despite the savings they had made. However, annuities offer a perfect solution to them as a monthly income is guaranteed to them for life.

Now this does not mean that other investment options are not worth exploring. People have made their fortunes in the stock and foreign exchange markets, and if you feel your money is safest there, nothing is stopping you from investing in them. On the other hand, you can purchase bonds or certificates that you can keep with the bank and earn an interest on them. However, there are two main things that need to be clarified regarding these investment options.

There is always a 50% chance that you can end up making a loss and the risk is greater and the current volatility in the market does not make them viable options for retirees. · Both methods focus on creating wealth instead of generating an income stream. At an advanced age, wouldn’t you rather live comfortably knowing that money will come into your account? The alternative is to keep drawing from your savings or the wealth you create, which can to run out should you have to bear any major expenses.

Money will not run out

In this regard, annuities will have you set for post-retirement life. Your money will not run out, that much is certain, and there is no chance that you are going to outlive your income. Having worked so hard all your life to get to this position, it only makes sense that you enjoy the twilight years of your life in comfort.

Given the fact that life annuities are guaranteeing income for life, it is not surprising how popular they are. Today’s seniors think of an annuity income as a cheque arriving in the mail.

What needs to be done is for you to think of them as the best retirement income option. After all, life annuities aren’t subject to market risk. If you are inclined to invest in the financial markets, it is a good idea to have some money in an annuity while using the rest in any way you want. At least then you can breathe with ease, knowing that the annuity is going to provide a monthly income for life, even if you lose the other part of your money.

Ivon T Hughes
Phil Barker

About the Author

Phil Barker

Phil Barker is a leading expert on life annuities in Canada. has different financial products and has been a recognized authority since 1972.

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