Why 2025 is the Perfect Year to Start an Annuity

Understanding Annuities: A Primer

When considering financial planning for retirement, annuities can play a key role in ensuring a steady income stream. Annuities are essentially insurance products that provide you with a series of payments over time, either for a fixed period or for the remainder of your life. They are often used as a strategy to mitigate the risk of outliving one’s savings.

The Economic Landscape of 2025

The year 2025 presents a unique economic landscape that is highly conducive to making annuities an attractive option for both pre-retirees and retirees. With interest rates projected to remain stable and inflation concerns ever-present, annuities offer a fixed income option that safeguards against market volatility. The security that stems from guaranteed payments can be particularly appealing during uncertain economic periods.

Benefits of Starting an Annuity in 2025

There are several compelling reasons to consider starting an annuity in 2025:

• Inflation Protection: Certain annuities come with inflation protection built into them, which can ensure that your purchasing power is preserved over time.

• Tax Advantages: Annuities allow your investment to grow tax-deferred, meaning you won't pay taxes on the earnings until you begin withdrawals.

• Guaranteed Lifetime Income: Annuities can be tailored to provide guaranteed income for life, alleviating concerns over longevity risk.

• Diversification: Adding an annuity to your retirement portfolio can provide diversification, spreading risk across various investment types.

How to Choose the Right Annuity

There are several types of annuities, including fixed annuities, variable annuities, and indexed annuities, each with different risk levels and potentially differing benefits. Choosing the right annuity involves understanding your financial goals and working with a financial advisor to determine the right product for your needs. At NLS Insurance, we value customization and working alongside clients to help them find a product that best meets their goals.

Final Thoughts

As we near the start of quarter 2, the timing might be perfect to add an annuity to your financial strategy due to the economic stability and the potential for inflation protection. Before making any decisions, it's crucial to consult with a financial advisor to tailor a solution that best fits your unique circumstances.