3 Benefits of a Deferred Annuity

Having a steady income in retirement is important, even if you plan on utilizing Social Security benefits. While payment plans through pensions are great, not everyone has access to these kinds of payment plans in retirement. Another option is to save using an individual retirement account (IRA) or 401(k) account, but once again, these options may not be available for everyone.

If you’ve found that you can’t rely on Social Security alone and a pension, 401(k) or IRA can’t be accessed, you may consider a deferred annuity plan. These plans allow you to pay money into an account over time to receive a steady stream of income back in the future.

Below are three benefits of a deferred annuity option:

1. Your Income is Guaranteed

Unlike investments that involve the risk of loss, most deferred annuity plans provide a guaranteed stream of income in retirement. This means that you will receive a specific amount of money paid to you according to your agreement, regardless of market performance. The downside here, of course, is that you don’t receive any additional funds if the market does outperform.

2. You Can Pay In Through Your Paycheck

Like with a 401(k) or similar retirement investment, you can pay into most deferred annuities over time through deductions from your paycheck. This may make it easier to save since you won’t necessarily notice the money being taken out.

3. Deferred Annuities May Include Survivor’s Benefits

Some deferred annuities will include survivor’s benefits, meaning your annuity payments may continue to be paid to a family member or designated individual upon your passing. Not all annuity providers offer this option, however, and your full payment may not be able to be passed on.

Work With an Advisor and Provider in Your State

If you want further information on deferred annuities, you’ll want to work with a financial advisor in your state. Different states have different laws regarding annuity products, and your local advisor can help you navigate the regulations in your state.

If you’re in New York City, for instance, you may want to search for a deferred annuity NYC providers are authorized to offer. Because of the aforementioned state regulations, a deferred annuity NYC providers can offer may be different than a deferred annuity other state providers can offer.

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