Fixed income annuities vs. Money market for retirees
We are losing much of our retirement savings in the money market. Are fixed annuities a good alternative for the next 5 years?
Terry Says
What do you mean “losing” in a money market? The money is still there! Do you mean losing buying power because you are earning less than inflation? Well an annuity would be even worse. At least rates on a MM fund will go up eventually if inflation continues
If you take out an immediate annuity– a check a month for life –(or for your life and that of your spouse), the money will arrive every month. But at even 3% inflation it will lose half its spending power in 20years. And at 85 inflation(and I don’t think that will be the case) your spending power will be cut in half in less than 10 years.
When you lock yourself into an immediate annuity check a month, you lose flexibility and buying power.
There is no other annuity investment I would even recommend for a retiree.
