On a semi-regular basis, I get the question, “I already have a pension. Do I need an annuity?”, or “I’m thinking about taking the lump-sum option and purchasing an annuity. What do you think?”
Although this question is less frequent as the years go on because fewer and fewer people have a Defined Benefit pension, it is one I take very seriously. Those of you who know me, and my background of starting Atlas Financial Strategies, know that I started this company after 7 years of research looking for a suitable replacement to my own Defined Benefit pension that was changed to a Defined Contribution.
The insurance/annuity industry is the only industry that offers financial products that closely mimic the safety and guarantees of a Defined Benefit pension. So, if you do not have a guaranteed pension, then an annuity should definitely be considered to add to your portfolio and income plan.
But what if you already have a guaranteed income from a pension? Do you need an annuity?
In the video below, I give my answer using two recent case studies where this question came up, along with the figures I used to give my solution.
I will demonstrate the following in this short video:
- How using an annuity in conjunction with your pension could allow you to take the highest payout
- How using an annuity in conjunction with your pension could replace lost survivorship benefits
- How using an annuity in conjunction with your pension could leave you with a larger legacy benefit for heirs
Give it a watch and if you have any questions, feel free to reach out!