Over the past several years – due in large part to the 2008 recession – confidence about retirement has been pretty much down in the dumps. In fact, according to the Employee Benefit Research Institute (EBRI), only about 37% of workers in 2015 were "very confident" about having enough money to live comfortably throughout their retirement years. That number is up from only 28% in 2014 and 18% in 2013, but still means that well under half of savers feel they're on track.
And based on LIMRA's Secure Retirement Institute Review, a study that took a look at people's knowledge and attitudes regarding annuities, it appears that those who own these particular financial vehicles have more confidence in their ability to live the retirement lifestyle that they want – especially as compared to those who do not own annuities.
The gist is that the more that people knew about annuities, the more that their confidence seemed to grow, and the more positive that their attitudes were about the products.
Annuities and Retirement Happiness
For many people, an annuity can be an extremely useful tool when it comes to retirement planning. However, there is also a great deal of misinformation about these financial vehicles, which can often scare people off due to their complexity. (For more, see: Why Retirement Optimism is Slipping for Many Americans.)
So, what is the answer to help ensure that you end up with the product that's best for you and your retirement planning?
First, it always helps to become as educated as possible about any financial products that you are considering – or even about those that you may not yet be considering for your portfolio. This is because "knowing what you don't know" can end up benefiting you in the long run. (For more, see: How Much is a Financial Planner Worth?)
Learning about different financial products and how they may or may not fit into your overall portfolio is essential in helping you to both build wealth and avoid potential financial scams.
It can also help to use online tools and illustrations that are available to you. These can assist you in really seeing how certain types of annuities could accumulate funds over time and/or provide you with a retirement income when the time comes.
If you are still unsure about anything, ask a pro. There are many insurance and annuity experts available – both in person and online – who are ready and willing to answer any questions that you may have in order to ensure that you fully understand the products before you move forward. (For more, see: How to Find a New Financial Advisor Who's Right for You.)
Annuities can have a lot of fine print associated with them – so if you need additional explanation, be sure to inquire about any and all of it before you take the plunge. Better to know what you're getting into and feel comfortable up front.
In doing so, knowing what you can expect is likely to raise your level of confidence about what you are placing your money into – and the income you will be receiving when you're ready to convert it over to a lifetime income stream. (For more, see: What Will Healthcare Cost After Retirement?)
Retirement with a Guaranteed Income
If you're ready to be more confident about the type of lifestyle you want to live in retirement, having a guaranteed lifetime income can help. This is because being able to count on an income coming in, month in and month out, and knowing that expenses can be paid, will help you to have one less thing to worry about.
It's important to keep in mind, though, that not all annuities are the same. In fact, there are many different types of annuities to choose from. So, you will want to be sure that you end up with the annuity that is right for you – not the company you buy it from. (For more, see: Annuities: How to Find the Right One for You.)
Being able to compare from a variety of different carriers can help you to decide in a much more unbiased manner, and to narrow down which one will be the right fit for you and your specific goals. One option for annuity shoppers is an independent insurance advisor, who can help savers pick the right product. (For related reading, see: Can You Afford a Financial Advisor?)