Will Annuities Build Confidence In Retirement Strategies?

April 4, 2013 - PRLog -- In recent months the job market has rebounded and the stock market has soared, reaching new heights and all but wiping out the catastrophic losses of the past few years. However, it seems that few of the workers in the trenches share the same optimism that is driving this economic upswing.

Confidence in the ability to save for and enjoy retirement has hit record lows, with a recent report issued by the Employee Benefit Research Institute indicating that almost 30% of those surveyed having no confidence they will afford to retire. Workers remain unsure of their job stability and realize they have to save more money at the same time that rents and cost of living soars.

The lack of confidence also stems from new-found uncertainty about which financial products are best for retirement. Decades of belief that the stock market was a sure bet for building retirement funds have been shattered by the plunges of the last decade. Many people close to or in retirement saw their life savings depleted in short order. Workers know they need to save and invest in financial products, but they remain unclear about the path to take.

Into the arena comes the antithesis of volatile market securities that many people are shunning, behold, it is none other than the simple, age old, annuity. An annuity is a contract between an individual and an insurance company that distributes income based on contractual guarantees a lot like pensions from days gone by. Annuities are often considered ‘boring’ by investors and have been somewhat overlooked in the recent past. Dick Van Dyke, founder of the website Annuity Rates Instantly (http://annuityratesinstantly.com), recommends researching the use of annuities as a foundation to balance a portfolio for retirement. Annuities can provide you with a known income stream for life and, as Van Dyke says, “the income foundation portion of your portfolio is key” to a secure retirement. Saving money for retirement is great, but you need to be sure to have it strategically positioned so you can access it when needed and also have a determinable income stream. Given the current sense of uncertainty with the job market and lack of confidence in their savings, baby boomers should consider annuities when saving and planning for retirement.