Life insurance annuities may help calm retirement fears

Nov 09, 2010

There are ways to prepare for retirement and lessen fears.

Funds declining in 401(k) plans and the employment situation in general may lead consumers to fear they'll never be able to retire, according to a recent report from the Chicago Tribune.

However, the paper said there are a number of things worried consumers can do to dissuade those negative feelings. Like any other financial endeavor, having a budget and determining necessary from discretionary spending is a place to start.

"Know what it takes to keep you fed and sheltered," the Tribune said. "If that basic amount truly couldn't be covered with what you project your retirement income to be, at least you'll have an idea of the gap you need to close."

Another option the paper suggests is purchasing annuities, which can provide an additional source of monthly income. However, as with any other investment, experts suggest consumers consider the product and the risks and returns it presents.

For example, consumers may consider a fixed annuity. While the returns on investment may not be as large on this life insurance product, it also presents lower risks.

Those who may be willing to be a little more daring may consider a variable annuity, which can offer higher returns.

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