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Personal Finance

Your Guide to Annuities

In this special report, discover whether annuities should play a role in your retirement portfolio and how to find the right fit.

It's every retiree's goal to not run out of money in retirement. Without the comfort of a defined-benefit plan that pays out guaranteed income, many retirees are left to their own devices when it comes to generating cash flows from their portfolios to supplement their Social Security benefits over a lifetime.

Some try to wring a livable income stream from their portfolios by using bonds. Others take more of a total return approach to portfolio withdrawals.

Still others rely on annuities for a portion of their retirement income. Should you?

"If there is one investment that sparks both deep confusion and heated debate, it's annuities," says Morningstar director of personal finance and retirement planning Christine Benz. There are many different types of annuities--some simple and some complex--and they can be costly.

“The result is that some investors who could benefit from an annuity miss out, while others end up locking themselves into products that can do real damage to their financial plans,” concludes Benz.

We’ve developed this guide to help you determine whether an annuity should be a part of your retirement tool kit--and if yes, how much to allocate to one and how to buy one.

Is an Annuity Right for You? To understand whether these complicated products might suit you, start with the goals you have for your money.

Understanding the 4 Key Annuity Types Annuities can offer valuable protection against outliving your assets, but they can also be high-cost and complicated. We dig into some pluses and minuses.

How to Buy an Annuity If you've decided to purchase an annuity, you'll also need to think through where to hold it, how much to annuitize, and when to make the buy.

How to Use Annuities During Retirement When to consider annuities rather than bonds.

Do You Need an Annuity for Retirement Income? Some guidelines on figuring out if an annuity makes sense for you, and if so, how much to allocate.

Are Annuities a Good Idea in a High-Inflation Environment? While some annuities offer inflation protection, it may not be worth the cost. Here's why.

What to Know: Indexed Annuities Lower risk has a high price.

Would Your Rather Buy an Annuity or a Guaranteed Income for Life? We put this question to the test to learn more about how retirement savers perceive annuities.

Podcast: Kerry Pechter: How Annuities Fit Into the Retirement Income Puzzle The author and columnist unpacks the benefits and limitations of annuities in an era of ultralow yields.

Watch: Do Annuities Belong in Your Retirement Tool Kit? These vehicles can be bewildering.


Should Your Employer Default You Into an Annuity? Yes--but only if it is a good one.

Why the Government Should Learn Which Annuities Are Useful The right policy could make annuities easier to use for retirement savers.

Download the White Paper: Should We Have More Annuities? Tackling Obstacles on the Path to Retirement Security

For Advisors

How Can Advisors Help Assemble a Secure Retirement Income Solution? Advisors can play a key role in popularizing annuities and providing greater retirement security.

Is an Annuity Right for Your Client? Evaluating how well an annuity would deliver on common financial goals, from income production to tax efficiency.

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