Attention Plan Sponsors:
Learn About Annuities and How They May be an Added Benefit to Anyone’s Retirement Planning Strategy
Well-rounded retirement planning should include more than stocks, bonds, and investments. In many cases, insurance can also play a part in an employee’s retirement planning. One major way insurance can add value to an employer sponsored retirement plan is through an annuity.
Annuities are products that provide a fixed income stream to individuals in their retirement. These plans are highly customizable and can be a valuable benefit to anyone considering retirement. Read on to learn more about annuities and how they may be a part of your retirement planning strategy.
What Is an Annuity?
An annuity is an insurance product. This product is a long-term contract with an insurance company. The contract allows you to save interest-nearing money on a tax-deferred basis. In exchange, you are guaranteed income for the rest of your life through annual (or monthly) payouts. Annuities can be customized to whatever works best for you and your retirement planning needs.
What Are the Benefits of Annuities?
Annuities offer a guaranteed retirement payment for the rest of your life. In other words, you will not outlive your annuity. As wonderful as that benefit may sound, annuities offer several other benefits that other types of investments cannot provide.
Annuities are a mixture of insurance and investing. However, due to the insurance piece, your principal balance is protected, no matter how the market fluctuates. In other words, you are guaranteed to receive your principal balance in your payout when your annuity matures.
Another benefit to an annuity is the right to leave any remaining benefits to your beneficiary. While your goal is to have your annuity in retirement, if you pass before your payout has completed, your beneficiary can receive the remainder of your annuity as an insurance benefit.
Should Annuities be the Only Source of Retirement Savings Available to Employees?
It is best to offer your employees the opportunity to diversify their retirement portfolio by installing a 401(k) profit sharing plan. They should be able to invest in many different types of funds, stocks, bonds, and even savings products.
Insurance options, such as annuities, can be one piece of their investment portfolio that can help them in retirement planning with minimal risk.
The key is to work with an adviser that can offer your employees different options for retirement savings in addition to the 401(k) plan. The more retirement planning options you offer employees, the more likely even the most conservative investors will participate.
Conclusion
To learn more about the benefits of annuities as part of your employer-sponsored retirement savings program, contact Scott Tanker at Retirement Plan Services Group at 609.922.0201. His team will gladly work with you to help learn more about annuity options and how they can benefit your employees and add to their retirement savings portfolio.