Are Multiple Annuities A Good Idea For Retirement Income

Why purchase multiple annuities? When purchasing an annuity, you exchange a payment upfront for a reliable future income. There are various types of annuities available, each offering distinct payouts and growth methods. Obtaining multiple annuities allows you to customize your retirement income plan by combining features, resulting in a tailored strategy that suits your desired benefits.

Advantages and disadvantages of buying multiple annuities include enhanced diversification, multiple income streams, a customized approach and the potential for better rates and terms. However, there are also potential costs, increased complexity and limited liquidity.

Strategies for buying multiple annuities include using a split annuity, which involves funding an immediate annuity that starts payments right away and a deferred annuity that accumulates value over a specific period, providing a continuous stream of income. Another strategy is laddering annuities, which divides your investment into smaller annuities purchased over several years to reduce risk, take advantage of potential interest rate increases, and manage cash flow while benefiting from long-term growth potential