Annuities vs. 401(k) Plans
Security: Annuities offer guaranteed income, which is not present in 401(k) plans. However, 401(k)s often have higher potential growth.
Investment Options: 401(k) plans provide a range of investment choices, while annuities have limited options.
Fees: Annuities typically have higher fees than 401(k) plans, impacting long-term growth.
Tax Benefits: Both offer tax-deferred growth, but 401(k) contributions reduce taxable income in the year they are made.
Annuities vs. IRAs
Contribution Limits: IRAs have annual contribution limits, whereas annuities do not.
Withdrawal Rules: Annuities may have stricter withdrawal rules and penalties compared to IRAs.
Investment Control: IRAs offer more control over investments than annuities.
RMDs: Both are subject to Required Minimum Distributions (RMDs) after age 72.
Annuities vs. Stocks
Risk Factor: Stocks are riskier but offer higher potential returns compared to annuities.
Income Guarantee: Annuities provide a steady income stream, which stocks cannot guarantee.
Liquidity: Stocks are more liquid than annuities, offering easier access to funds.
Dividend Income: Stocks may provide dividends, adding an income component similar to annuity payments.
Comparing Annuities With Other Options
Annuities are worth considering for those seeking guaranteed income and risk aversion in retirement planning. They offer stability compared to the higher growth potential but increased risk of 401(k) plans, IRAs, and stocks. The choice depends on individual financial goals, risk tolerance, and retirement planning strategies. Contact us today for a free quote.
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