Have millennials learned a lesson from their parents? According to the J.D. Power 2018 Group Retirement Satisfaction Study, millennials are better prepared for retirement than Generation X’rs and Baby Boomers. The study showed that more than sixty percent of millennials have at least $25,000 in retirement savings. Additionally, over half have set retirement goals, which is more than Generation X and the Boomers (44%). Finally, 83% of millennials said they were on the right track to meet their retirement goals.
There are a number of different ways to save up for retirement, but some are smarter than others. If you are younger, a tax-deferred retirement account makes a lot of sense as it will have significant time to grow, and you won’t have to worry about swings in the stock market as much as you would if you were older. You can take more risks when you’re younger, but that doesn’t mean there isn’t some benefit of playing safe.
According to the J.D. Power Study, very few millennials surveyed had an understanding of how annuities worked. However, once they were explained about how annuities can offer their owners a stream of income payments that were guaranteed by an insurance company, they started to come around to the idea of investing in an annuity. Annuities can be developed to meet your retirement goals, and you can have payments start whenever you want, depending on when you think you will need them in retirement.
What Happens If You Need Money Now?
Once the terms of the annuity are established and a deal is signed, you can’t decide that you want to change things because your situation is different now than it was when you purchased the annuity. This is why it’s important to keep in mind that you can always sell some or all of your annuity payments
Of course, you should only sell your annuity payments for cash if it’s a legitimate reason, like if you need to pay high-interest debt off or your house needs a major repair. You can sell all or some of your payments, depending on how much you need. Finally, keep in mind that you should only work with buyers who offer a fair price, have a good reputation with the Better Business Bureau, and will keep you in the loop throughout the process.
By sticking with these rules, you can protect your future by solidifying your current finances.