With traditional sources of funding retirement disappearing, the burden of saving for retirement has shifted to the American worker. Americans, however, are falling short of meeting that challenge, according to The Voya Retire Ready Index™. Workers and retirees who averaged the highest scores on retirement readiness report optimizing their savings and investing in a wide range of products. Products like annuities offer a tax-deferred way for you to grow and protect your savings, making them an appealing component of a strategic retirement plan.
Retirement Readiness Role Models
The Voya Retire Ready Index™ was designed on the premise that successful retirement preparation involves three important components: knowing, planning and having. The study – conducted with Greenwald & Associates, Inc. – asked current and retired workers a series of questions related to these three retirement readiness components and the highest scorers were considered role models.
- The highest scorers were more likely to have multiple products in their portfolios.
- The highest scorers were more than four times as likely as the lowest scoring workers to own annuities.
Don’t overlook annuities
When creating a retirement plan, diversifying among a wide range of products can help increase earnings while protecting against risks. One of the few investment products that provide tax advantages and a guaranteed income source in retirement is annuities.
Annuities are basically contracts between you and an insurance company, where the insurer agrees to make periodic payments to you, starting either immediately or at a future date. You defer paying taxes on your contract’s interest until you receive your payment(s), allowing you to potentially grow your savings over time.
Finding the right mix of investments to meet your needs should be based on your own risk tolerance and time horizon. To be ready for retirement, the study confirms that making saving a priority and finding the right mix does make a difference.
Ask questions. Lots of them.
There’s no substitute for good advice. Now that you’re armed with a little knowledge, talk to a financial advisor to help you create a sound investment strategy that fits your financial goals and needs. They’ll be able to point you in the right direction.
IRAs and other qualified plans already provide tax deferral like that provided by an annuity. For a cost, annuities provide other features and benefits such as contract guarantees, death benefits or lifetime income. If other options are available, you should not purchase a qualified annuity unless you want these additional features and benefits taking into account their cost.
Annuities are issued by Voya Insurance and Annuity Company (Des Moines, IA), ReliaStar Life Insurance Company of New York (Woodbury, NY) and Voya Retirement Insurance and Annuity Company (“VRIAC”, Windsor, CT). Variable annuities are distributed by Directed Services LLC. Within the state of New York, only ReliaStar Life Insurance Company of New York and VRIAC are admitted, and their products issued. All are members of the Voya® family of companies.
All guarantees are based on the financial strength and claims paying ability of the issuing insurance company, who is solely responsible for all obligations.
Variable annuities are subject to investment risk, are not guaranteed and will fluctuate in value. In addition, there is no guarantee that any variable investment option will meet its stated objective.