Women Can Create Their Own Pensions
Proven Methods Reduce the Rsk of Retirement for Women-and Men
MEDFORD, OR / ACCESSWIRE / January 7, 2020 / Women face big challenges securing their retirement. They earn less than men on average and that translates into lower savings and Social Security benefits. And they live longer, so their savings have to last longer.
Women tend to be more risk-averse than men, but the safest investments, such as Treasuries and certificates of deposit, are both low-yield and taxable unless held in a retirement account.
Another low-risk savings vehicle, the fixed annuity, is often overlooked by women. “However, fixed annuities can build faster wealth than other safe bets,” says Ken Nuss, CEO of AnnuityAdvantage, an online annuity marketplace.
Fixed-rate annuities behave much like CDs, offering a set interest rate for a set number of years. They are guaranteed by the issuing insurance company and are further backstopped by state guaranty associations. The level of protection varies by state.
Two key advantages help women build their savings faster: tax deferral and generally significantly higher rates than CDs or Treasuries with a comparable term. Without taxes, savings can grow faster.
Fixed annuities are a valuable supplement to IRAs and 401(k)s, Nuss says.
During retirement, a fixed annuity can be annuitized: that is, converted into a guaranteed stream of lifetime monthly income. In other words, a woman can use it to create a private pension.
A different type of annuity offers another route.
Instead of putting money in a fixed annuity and annuitizing it later, you can use the funds to buy a deferred lifetime income annuity now, Nuss says. A deferred income annuity is also called a longevity annuity.
You deposit your money with an insurance company. In exchange, the insurer will begin paying you a lifetime stream of income starting at a future date you specify. The longer you can afford to delay taking payments, the larger they’ll be.
If you need income right away, you can buy an immediate lifetime income annuity instead.
Many economists recommend that women and men devote a substantial portion of their assets to lifetime income annuities because they offer insurance against the financial risk of living to a very old age.
“If you don’t have an employee pension or if it’s inadequate, don’t despair. Use your savings to create your own guaranteed lifetime pension,” Nuss says.
Annuity expert Ken Nuss is the founder and CEO of AnnuityAdvantage, a leading online provider of fixed-rate, fixed-indexed and immediate income annuities. It provides a free quote comparison service. He launched the AnnuityAdvantage website in 1999 to help people looking for their best options in principal-protected annuities. More information, including updated interest rates from dozens of insurers, is available at https://www.annuityadvantage.com. Call (800) 239-0356 or write .
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