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Adding annuities to a retirement portfolio is often recommended as a way to provide a guaranteed and stable income. The basic concept is simple. You buy the annuity with a lump sum and in return get a fixed monthly income for the rest of your life.

People shopping for annuities quickly discover that the reality isn’t as simple as the concept. The product described above is a fixed lifetime annuity but there are other options. Which one is best for retirement?

Fixed vs. Variable

Fixed annuities pay a guaranteed income every month. This amount of money is paid to you regardless of market fluctuations or other events. It is a stable investment with a safe pay off which makes it ideal for retirees.

A traditional fixed annuity doesn’t increase its payments as prices change, meaning that your buying power will slowly decline over time. Look for annuities that offer cost of living protection. They cost a bit more but the payments will adjust with inflation so you can maintain your lifestyle.

Variable annuities offer payments that fluctuate with market conditions. In the long run they pay better returns, but that doesn’t mean much if the income drops enough that you can’t pay your bills this month. Most retirees opt for fixed products.

Lifetime vs. Term

Lifetime annuities pay every month for the rest of your life, no matter how long you live. This makes them excellent insurance against the risk of outliving your assets. There is no limit to the payout so you may end up being paid more than the money you invested.

Term annuities offer income for a specified period of time. Because the offering company can more accurately judge their liability, term products offer better monthly income than lifetime products.

There are rare cases where a retiree may know future income needs will be reduced, say when a spouse’s pension kicks in, so would be safe choosing a term product. However in most cases, lifetime annuities are the better retirement choice.

Other Annuity Options

Joint annuities are popular options for married couples. The payments are made to both parties so that, even if one dies, the other will continue to receive income.

Premium protection guarantees that the total value of the annuity is at least what you originally paid in. If you should pass away before you have received payments equal to the value, your heirs will continue to receive the payments until the full value has been met. The monthly payouts will be a bit lower, but the guarantee is worth it to many investors.

One of the most important features of buying an annuity is the strength of the company holding it. Invest only with highly rated providers. If the company fails, your investment fails with it.

New York Life life insurance is the United States’ oldest and largest life insurance company. Serving its policyholders as a mutual insurance company, the agency is able to keep up with the demands of quality coverage for its customers without being severely affected by the recession. Its core values were built based on financial strength, which are the following:

• To provide financial stability and peace of mind through the following:
  • Their insurance
  • Their annuity
  • Their investment on products and services
• To continue to be a mutual company distinctively allied with their customers
• To maintain outstanding mutual strength
• To act with integrity and humanity
• To be there when consumers and policyholders need them the most

New York Life life insurance is known for its long-term insurance guarantees and its high credit ratings. Its current portfolio reveals the company to have very few problems in the market today, which makes the company more powerful and stable financially. This is because the company thrives off of these three factors:

• Their mutual ownership with policyholders
• Their superior financial strength
• Their disciplined and traditional investment approach

Currently, New York Life life insurance has several lines of insurance dedicated to consumers’ and policyholders’ advancements in their lives or life’s complications. They are:

• Life
• Lifetime Income
• Investment Annuities
• Long-Term Care
• Mutual Funds
• Many more

People who evaluate New York Life effectively will see that the company offers competitive premiums at affordable prices. In addition, the stability of the company is an added bonus that certifies its competitiveness in the insurance industry.

New York Life life insurance is headquartered in New York, NY. Any potential looking to buy insurance from the agency can fill out a quote form on their website online or contact them via phone.