Safe Investment No. 5: Annuities
Since very few boomers have pensions, CFP Shannon Ryan recommended annuity products for conservative boomers who’d like a “guarantee” of an income they cannot outlive. An annuity is an investment vehicle sold through an insurance company and one of the few investments that guarantees returns.
“Annuities are more expensive than many investments and do typically have a surrender fee schedule in the first 10 years,” said Ryan. “But when used appropriately in a balanced portfolio, they can add some confidence to the stability of income.”
Annuity costs vary depending on their structure, requiring careful review. In choosing an annuity, financial advisor Shannon McLay of Financial Gym said the primary feature that you should look at when determining the best annuity for them is the guaranteed component. “As long as the guaranteed payment is a number that would meaningfully contribute to [your] other regular retirement income, then it will work in [your] overall retirement strategy,” she said.
