Ep 433: Are Annuities A Good Investment? What They Are And Why Women Should Consider Them

HerMoney with Jean Chatzky

Jean Chatzky Her Money

Investing, Entrepreneurship, Business

4.8 • 1.3K Ratings

🗓️ 24 July 2024

⏱️ 49 minutes

🔗️ Recording | iTunes | RSS

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Summary

When we think about our financial fears, one tops the list: Running out of money before we run out of time. According to the Center for Retirement Research at Boston College, half of all US households are at risk of not having enough income to maintain their standards of living in retirement. The bottom line is that Americans have a problem and we know it. The good news is that we have the ability to fix this problem in our own individual lives, with tools we already have access to today. They’re called annuities, and more people are interested in, and buying annuities, than in years past. Minji Ro, Chief Strategy Officer at Gainbridge, and Jason Fichtner, Chief Economist at the Bipartisan Policy Center join us to talk about what annuities are, why economists like them, and the advantages of considering them as part of your retirement portfolio. Chapters: 0:00 Intro 4:04 Defining Annuities: What They Are 12:06 The Shift in Retirement Income Strategies Over Time 14:01 The Three Major Types of Annuities: Fixed annuities, Fixed Indexed Annuities, and Variable Annuities 21:23 Transitioning Mindset: From Saving and Accumulating To Spending And Securing Protected Income 24:28 Annuities and Managing Longevity Risks As Women 30:00 Transition to Mailbag Segment 33:23 Retirement For Highly Compensated Employees 41:34 When To Get A Second Opinion From A Financial Planner Takeaways: Annuities can provide a guaranteed stream of income during retirement. There are three main types of annuities: fixed, fixed index, and variable. Economists like annuities because they offload risk and provide income protection. There is a behavioral barrier to annuitization, but changing the framing and understanding the benefits can help overcome it. Women, who earn less and live longer, should consider annuities to manage longevity risk. Have a question for us? Write to us at [email protected]. While you’re at it, join the HerMoney community! For the latest episode drops and financial news-you-can-use, subscribe to our newsletter at Hermoney.com/subscribe! The HerMoney with Jean Chatzky podcast is sponsored by Edelman Financial Engines. The podcast team and its host are neither employees nor clients of EFE, however, the show does receive fixed compensation and is a paid endorser and therefore has an incentive to endorse EFE and its planners. To learn more about the sponsorship, please visit PlanEFE.com/HerMoney. Thank you to Gainbridge® for supporting the HerMoney podcast. Gainbridge® created ParityFlex™, a multi-year guaranteed annuity, to offer women security and flexibility at a time when they need it the most—retirement. Learn more about ParityFlex™ here. Please contact [email protected] if you would like to advertise on our podcast, and to learn more about Airwave, head to www.airwavemedia.com. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	You're listening to an Airwave Media Podcast.
0:05.0	Are you on track for the retirement you want?
0:09.0	Now's the time to find out.
0:10.0	Schedule a free retirement review with the Edelman Financial Engines Wealth Plan
0:14.4	and they'll also give you a financial plan made just for you.
0:17.7	See if you're on track to meet your goals and what opportunities you might be missing.
0:22.2	To get started, call 833 Plan EFE or visit plan EFE.com.
0:27.7	That's 833 Plan EFE or Plan EFE.com. This offer expires July 31st, so don't miss out. Schedule yours today.
0:38.0	Hey everyone, I'm Jean Chatsky. Thanks so much for joining me today on her money
0:45.6	where we talk about how personal finance and money touches pretty much
0:49.2	everything in our lives. When we think about our financial fears, there is one that tops the list.
0:57.0	Running out of money before we run out of time. Here are just a few of the many data points.
1:04.0	61% of Americans are more afraid of running out of money in retirement than they are of dying,
1:11.0	according to Aliance, 66% of Americans fear they will run out of money during retirement,
1:18.4	according to go banking rates.
1:20.4	40% of households, where the head of household is between the age of 35 and 64 are
1:27.1	expected to run short of money in retirement according to the Employee Benefits Research Institute.
1:35.6	I think you pretty much get the idea.
1:37.9	Americans have a problem and as the aforementioned cut of many many studies all saying pretty much the same thing
1:45.9	shows we know it we know that unless we do something something big something different many of us are going to blow through the money that
1:55.4	we've stashed away for retirement long before we die. We may not quote unquote run out as so much research seems to predict but we'll find
2:07.1	ourselves left essentially with just Social Security which about three quarters of people believe is going to fall short itself,
	...

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