Common Myths About Annuities—and What to Know Instead

Annuities are often the subject of debate in retirement planning. For some, the word “annuity” brings to mind high fees, complex contracts, or lack of flexibility. For others, it represents a reliable stream of income. The reality lies somewhere in between. Many of the common myths about annuities stem from confusion about how they work—and which type of annuity is being discussed.  Understanding what annuities can and can’t do is key to deciding whether one fits into your overall strategy. Like any financial tool, annuities should be evaluated based on your goals, risk tolerance, and income needs. 

Annuities in Retirement: Evaluating Their Purpose in Income Planning

For many individuals approaching or living in retirement, reliable income becomes a top priority. While savings and investments provide flexibility, not all sources of retirement income are predictable. That’s why some retirees consider including annuities in retirement income planning. These insurance-based products can offer structured payments that supplement other income sources like Social Security and investment withdrawals.  Understanding how annuities work—and when they may or may not fit into your overall strategy—can help you make informed decisions based on your needs and preferences.