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Should I split my retirement money between an indexed annuity and company 401(k), or invest it all in an annuity?

I am retiring at age 63 and planning to live on savings until age 66 (full retirement age) and then dip into Social Security. I am trying to decide if I should keep some money in my existing company 401(k) and invest the rest in an indexed annuity. Alternatively, should I invest everything in an indexed annuity? Is there another investment option I should consider?

Financial Planning, Retirement, Social Security, 401(k), Annuities
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January 2019

Hi thanks for asking the question before jumping into an annuity.  Annuities can be useful tools in retirement planning and may have a place in your planning if your level of savings may not be enough to sustain your desired lifestyle. 

What is the reason you are considering the indexed annuity? 

Generally speaking you buy an annuity to protect against outliving your assets.  So you therefore want to use up the least amount of savings to purchase as much income as possible.  Typically a single premium immediate annuity or a qualified longevity annuity contract will provide that.  Variable annuities and indexed annuities, for example, are not going to get you the same level of income without a higher premium. 

I'd suggest taking a step back and reviewing your situation, your needs and objectives.  If you have a qualified advisor, one who doesn't earn commissions based on selling you a product like an annuity, speak with him or her.  Have the advisor help you project the likelihood of you funding and sustaining your desired lifestyle and if an annuity has a place or need in there.  Also take a look at the benefits of delaying your Social Security income beyond full retirement age as well as review an appropriate investment strategy and plan for your 401(k) savings and any other savings/investments you may have.  Good luck and all the best!

January 2019
January 2019
January 2019
January 2019