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Annuities in 2023 .

Annuities in 2023 Exploring the Benefits and Considerations

It’s 2023, and we have seen a rapidly changing financial landscape. It is crucial to explore diverse investment options. As we age, we need to ensure that we can provide a stable and predictable income stream in retirement. Annuities have long been recognized as a popular choice among individuals seeking financial security during their golden years.

Annuities are becoming increasingly popular amongst people preparing for retirement. A recent study revealed that those who already owned them expressed an interest in acquiring more.

What are they?
“Annuities are financial products designed to provide a guaranteed income stream in retirement,” says David Beckerman, Senior Vice President of David Lerner Associates. “They are typically offered by insurance companies and come in different forms, including fixed annuities, variable annuities, and indexed annuities.”

They function by allowing individuals to make a lump-sum payment or a series of contributions to the insurance company. The insurance company promises to give regular payments to the annuitant. This will either be for a set period or for the rest of their life.

The same study showed most people seem to want to access this type of retirement saving vehicle. A majority of participants expressed a wish for annuities, regardless of their pension plan status.

Benefits of Annuities in 2023
Income Security: One of the primary benefits of annuities is the assurance of a steady income stream throughout retirement. They can offer a measure of stability and protection against market volatility. Contributions to annuities are usually made with after-tax dollars. However, the earnings grow without being taxed until withdrawals are made. This provides tax advantages. This can help individuals minimize their tax liabilities during their working years and potentially enjoy a lower tax bracket during retirement.

Customization Options:
With variable annuities, individuals can choose from a variety of investment options, allowing them to tailor them to their risk tolerance and financial goals.
Indexed annuities, on the other hand, offer the potential for growth linked to the performance of a specific market index while providing downside protection.

Considerations for 2023

Long-Term Commitment:
Annuities are typically long-term investments, and there may be penalties or surrender charges for early withdrawals or cancellations. It is important to carefully consider your liquidity needs.

Fees and Expenses: Like any financial product, annuities come with associated fees and expenses. These can include administrative fees, mortality and expense charges, investment management fees, and surrender charges. Working with a wealth management advisor from David Lerner Associates can help you understand and navigate these costs, ensuring that you make informed decisions.

Inflation Risk:
Annuities offer guaranteed income, but it’s important to consider the impact of inflation over time. While fixed annuities provide a steady income, they may not keep pace with rising inflation. To address this concern, individuals can explore options such as inflation-adjusted annuities or combining annuities with other investment vehicles to create a diversified retirement income strategy.

As retirement planning becomes increasingly complex, it is crucial to consider the role of annuities in securing a stable income stream during your golden years. David Lerner Associates’ Wealth Management Services provides you with access to expert guidance and personalized advice to navigate the intricacies of annuities in 2023.

Understand the benefits and considerations, explore customization options, and ensure that annuities align with your long-term financial goals. With careful planning and the support of a trusted wealth management advisor, you can make informed decisions that enhance your financial security in retirement.

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

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