People saving for retirement have a common goal: Build an adequate nest egg to prevent running out of money in old age.
One way for retirees to do that is via a guaranteed stream of income they can’t outlive — one that’s deposited into their bank accounts every month for the rest of their lives, like a paycheck.
At a time when workplace pension plans have largely disappeared, annuities can serve as an alternative for retirees seeking pension-like income, according to financial planners.
However, the types of annuities generally best-suited for the job — deferred income annuities, or DIAs, and single premium immediate annuities, or SPIAs — aren’t the ones that consumers often buy, financial planners said.
The reason largely comes down to consumer behavior, said Scott Witt, an actuary and fee-only insurance advisor based in New Berlin, Wisconsin.
