Annuities can be an essential addition to anyone's retirement planning strategy. Here are three compelling facts about annuities that you should know:
- Improved Portfolio Performance
Adding an annuity to a retirement portfolio lowers the risk and increases the return of that portfolio. If you're skeptical, consider the white paper from Ernst and Young which concluded that the best retirement portfolios include investments, life insurance, and annuities. It's not just my opinion; it's based on thorough analysis and research.
- Increased Happiness in Retirement
Believe it or not, studies have shown that people with guaranteed lifetime income from annuities are generally happier in retirement. Even the Wall Street Journal published an article stating that the secret to a happier retirement is friends, neighbors, and a fixed annuity. Retired individuals, such as military personnel, government employees, teachers, police officers, and firefighters, who receive guaranteed monthly paychecks tend to have more enjoyable retirements.
- Longevity of Life
Research indicates that individuals with guaranteed lifetime income tend to live longer. A study by the University of Chicago found that people who purchased lifetime annuities lived longer than those who didn't, and this was also highlighted in the Freakonomics podcast. Attorney Patrick Trickery, in an article for the Journal for Financial Service Professionals, noted that the average 65-year-old in America with a lifetime annuity lives 20% longer than those without such a product. The reasons are simple: less stress, no worries about market downturns, and more motivation to lead healthy lives.
Some people seek vitality through cold showers or expensive supplements. Perhaps it's time to consider the comprehensive value of an annuity the ultimate supplement for a secure and fulfilling retirement.
Full Transcript
I always say there's three facts that around annuities that you need to know. Number one, adding an annuity to a retirement portfolio lowers the risk and increases the return of that portfolio. And if you don't believe me, Ernst and Young just did a whole white paper on it. And they found that the best retirement portfolio had investments, life insurance, and annuities. It's not me. They're not counting firm. I've known it, but they did it. So that's number one, your portfolio performance will improve. Number two, you're going to be happier. Even the Wall Street Journal had the headline, the secret to a happier retirement is friends, neighbors, and a fixed annuity. And what they found is that the happiest people in retirement were those people, surrounded by their friends, surrounded by their families, would guaranteed paychecks every single month. I mean, think about it. Who are your happiest retired clients? This retired military, retired government, retired teacher, retired police men, retired fire fighters because it got engines. Happiness and retirement is tied almost 100% to guaranteed lifetime income, not assets. The most miserable people in retirement are the people with assets. And then number three, the research shows that you're going to live longer. If you have a guaranteed lifetime income, I mean, the university, Chicago did a whole study where they studied people who bought lifetime income, knowing first people who didn't. And the people bought the lifetime income, knowing he's lived longer than the people they didn't. Freak and nomads even put it on their Freakonomics podcast. There's something, oh, this is crazy. And then Patrick Trickery's an attorney. He wrote an article for the Journal for Financial Service Professionals. And he found that the average 65 year old in America, if they buy a lifetime income, annuity will live 20% longer than the people who don't have them. And he just explained why people of guaranteed income live longer. They don't have the stress. They don't worry. Markets down 40%. They go to another play another 80 holes at golf. And because they're being paid to live, guess what? Many of them choose to live differently. They watch what they eat. They exercise. They go see the doctor. So those are three simple reasons why you should have an annuity in your retirement portfolio. Yeah, some people take cold showers. Some people spend hundreds of dollars on supplements and sleep. I say we package it up and call it the the Hegna supplement.
