Annuities are an excellent choice if you want a secure post-retirement solution. Most Americans fear the option and look more towards other options, thinking their savings are insufficient for a good life after retirement. Laddering, however, is a solution to that thought. Annuity laddering is spreading the purchase of an annuity over a period of time where the interest rate risk is minimized. This investment strategy guarantees the most income returns for retirees, allowing them to leverage likely rising interest rates in the future. This is also because it allows retirees to maintain a portion in equity and other financial vehicles while only utilizing relatively small amounts in annuity per period. Annuity laddering is also used as a method of investing in certificates of deposits and bonds, as well as a way of minimizing all other opportunity costs. Through laddering, annuities may even be bought through different financial institutions. For example, if a retiree has $100 and decides to buy an annuity for $20 for an interest rate of 5%, (s)he still has $80 for other equitable investments. The next time, he may have a chance to buy an annuity of $50 at 8%, thus benefiting with a better rate, previous equity income of that $50, and still a chance to buy an annuity remaining $20 at a better rate. There are many ways the laddering strategy can be built, but it is important to remember that building a laddering strategy is a more personalized task for maximum benefit. Partnering with financial advisors who understand safe money products and fluctuating markets will gain the retiree the most individualized benefit. Fanning out the principal amount over a period of time, most commonly annually, will create a good ladder. Another spread could be over market fluctuations when the markets are in bear or bull mode to create the annuity ladder. Another good strategy is to compare and contrast the annuitization period of all the products offered by different financial institutions. Choose more than one annuity with the surrender periods with gaps in between. Checking the penalties for each as a result of breaking annuity is also to be kept in mind. A good mixture that offsets the pros and cons of each can be another good strategy to build the annuity ladder. With a well-crafted strategy, annuity through laddering can become the backbone of peaceful post-retirement life.
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Phone: 9143022300
Bio:
My name is Kevin Wirth and I have worked in the financial services industry for many years and I specialize in life insurance and retirement planning for individuals and small business owners, with a specialty in working with Federal Employees. I am also AHIP certified to work with individuals on their Medicare planning. You can contact me by e-mail or phone. I look forward to the opportunity of working with you on these most relevant areas of financial [email protected] 914-302-2300
