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Should I consider an annuity in my 40s and 50s?

Building financial security doesn鈥檛 have to wait until you鈥檙e ready to retire. If you鈥檙e in your 40s or 50s, you鈥檙e likely experiencing life events that require careful planning, whether it鈥檚 shifting careers, supporting aging parents or rethinking priorities. This stage of life can be an ideal time to create a flexible financial plan that can adapt to the unexpected while helping position you for a more secure future. 

With time still on your side, you have the opportunity to take advantage of long-term benefits like compounding interest and tax-deferred growth. And it鈥檚 also important to prepare for the ups and downs ahead, because chances are you may experience a few more market dips before retirement. By adding an annuity to your retirement strategy now, you not only gain growth potential and protection from market downturns for a portion of your savings, but also options for guaranteed income that can help support the goals you鈥檙e focused on today, and down the road. 

Rethinking the role of annuities

Annuities are often seen as tools for generating income after retirement, but that鈥檚 only part of the picture. They can be a flexible and strategic component of your broader financial plan. Whether you鈥檙e looking to grow your assets tax deferred, protect a portion of your savings from market downturns or create a predictable income stream before you officially retire, annuities can serve a wide range of purposes and provide support throughout your financial journey. 

Balancing growth and protection 

At this stage of life you may be in your peak earning years, focused on growing your wealth and trying to build retirement savings for the future. But the potential for growth can come with the risk of loss as well, and a poorly timed market downturn can throw even the best-laid retirement plans off track. By adding an annuity to your retirement income plan, you can gain tax-deferred growth potential that is also protected from volatile markets. This can help decrease your exposure to risk for part of your portfolio and give you more freedom to explore options with higher risk and growth opportunities to round out your plan.

Aligning an annuity with your life goals

An annuity is designed to help you reach long-term savings goals and provide guaranteed retirement income, but there are annuities that allow you to withdraw a certain amount each year without penalty 鈥� typically ranging from five to 10 percent or more. This option could be helpful as part of a college savings strategy, for example, if that length of time lines up with your child heading off to school. 

Creating a lasting legacy for your spouse or children may also be among your top priorities. Some annuities offer a death benefit and if you pass away before or while receiving payouts from your annuity, the remaining amount could go to your beneficiaries. Some annuities can also continue to provide guaranteed income to a spouse for the rest of their life. 

Being prepared for early retirement

Even when there鈥檚 a target date in mind, retirement timelines don鈥檛 always go as planned. Many people may envision working into their 60s or beyond, but life can throw unexpected changes your way, from health issues or job loss to caregiving responsibilities. Nearly , and while most say they鈥檒l retire at 65, 49% actually retire at 62. Having an annuity as part of a comprehensive retirement income plan can help you adapt to life鈥檚 changes and bridge the gap between early retirement and when Social Security or pensions begin. An annuity can also help ease the pressure to draw down investments early and may give you the flexibility to delay claiming Social Security in order to increase your future benefits. 

Creating a personalized strategy 

Your 40s and 50s are a critical time to get strategic about your financial future. Meeting with a financial professional can help you explore your short and long-term goals and determine which solutions may be a good fit. This may include taking a closer look at annuities and how adding more guaranteed income to your overall plan can help boost financial stability, reduce the impact of retirement risks and allow you to navigate life鈥檚 changing needs with greater confidence. 

Want the most from your retirement? Get smarter with Smart Strategies from 麻豆传媒. Your source for tips, tools and financial solutions that can help you live your best life.

Under current tax law, the Internal Revenue Code already provides tax deferral to qualified money, so there is no additional tax benefit obtained by funding a qualified contract, such as an IRA, with an annuity; consider the other benefits provided by an annuity, such as lifetime income and a Death Benefit.

Guarantees provided by annuities are subject to the financial strength and claims paying ability of the issuing insurance company.

The term 鈥渇inancial professional鈥� is not intended to imply engagement in an advisory business with compensation unrelated to sales. Financial professionals will be paid a commission on the sale of an 麻豆传媒 annuity.

Withdrawals and surrender of taxable amounts are subject to ordinary income tax, and except under certain circumstances, will be subject to an IRS penalty if taken prior to age 59陆.