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CBS News
5 days ago
- Business
- CBS News
Can you add multiple annuities to your retirement portfolio? 3 things to know
Retirement planning has always been challenging, and it has only gotten more complex in today's unusual economic landscape. Between the ongoing issues with stock market volatility and sticky inflation, and the questions about Social Security's long-term viability, many soon-to-be retirees are now looking for ways to create predictable income streams in their golden years. And, given these issues, it's no wonder that annuities, which are financial products designed to provide guaranteed income, have become a more common option worth considering. But as retirees dive deeper into their annuity research, they might find themselves wondering whether one annuity is really enough. After all, there are numerous types of annuities to choose from, with immediate annuities, deferred annuities, fixed annuities and variable annuities each serving different purposes. And, while diversification is a cornerstone of smart investing, in today's unusual economic landscape, adding stability is also key. So, can retirees add multiple annuities to the mix right now, and if so, should they? Find out how to add the right annuity to your portfolio today. The short answer is yes, you can own multiple annuities. People often buy more than one annuity to take advantage of different features, such as guaranteed income, growth potential or flexible withdrawal options. Some retirees pair fixed annuities with variable or indexed annuities to balance predictable income with the opportunity for market-linked growth. However, owning multiple annuities also introduces additional fees, paperwork and complexity that should be carefully weighed. So before you get started on this strategy, make sure you understand the following: One of the biggest considerations with any annuity is liquidity, meaning your ability to access your money when you need it. With multiple annuities, this planning becomes more intricate but also more flexible. After all, different annuities will have different surrender periods, withdrawal penalties and access provisions. Smart planning means coordinating these features across your various contracts. You might structure your annuities so that different contracts become fully liquid at different times, ensuring you always have some accessible funds without paying surrender charges. This approach requires understanding each contract's specific terms and timing your purchases accordingly, though. You'll also want to consider how multiple annuities fit into your broader emergency fund and liquidity strategy. While annuities shouldn't replace easily accessible savings accounts, having multiple contracts with staggered surrender periods can provide more options when unexpected expenses arise. Explore your annuity options and lock in a top rate now. By spreading your money across different insurance companies, you reduce the risk of being overly dependent on one company's financial stability. This becomes especially important when you consider that annuities are backed by the insurance company's ability to pay claims, not by government guarantees like FDIC insurance. Different types of annuities can also serve different purposes in your retirement plan. For example, you might use an immediate annuity to cover essential expenses like housing and healthcare, while employing a deferred variable annuity for growth potential and future income needs. This approach allows you to match specific products to specific goals. However, managing multiple annuities means dealing with more paperwork, different terms and conditions and varying fee structures. You'll need to track multiple contracts, beneficiary designations and withdrawal schedules. This complexity can become overwhelming, especially as you age, so having a clear organizational system is crucial if you plan to take this route. The tax implications of multiple annuities also require careful planning. While annuities offer tax-deferred growth, the way you structure and time your purchases and withdrawals can significantly impact your overall tax burden. With multiple contracts, however, you have more flexibility in managing when and how you trigger taxable events. For example, you could stagger the start dates of different annuities to spread income across multiple tax years, potentially keeping yourself in lower tax brackets. You might also use different funding sources — some annuities purchased with pre-tax dollars from traditional IRAs and others with after-tax dollars — to create more tax diversification in retirement. The key to getting it right is understanding that each annuity contract is treated separately for tax purposes. This means you can't offset gains in one contract against losses in another, and you'll need to track the cost basis and earnings for each contract individually. This complexity makes it important to work with a tax professional when pursuing a multiple-annuity strategy. Multiple annuities can be a powerful tool for retirement planning, offering diversification, tax flexibility and income security. But this strategy typically works best for people who have substantial retirement assets, can handle the increased complexity and have clear goals for each annuity purchase. Before adding multiple annuities to your portfolio, you should carefully evaluate your overall retirement plan, understand the fees and terms of each product and consider working with a financial advisor who can help you coordinate the strategy effectively. Remember, the goal isn't to collect annuities. It's to create a retirement income plan that gives you confidence and peace of mind.
Yahoo
23-07-2025
- Business
- Yahoo
AICPA and CIMA unveil new resilience toolkit for finance leaders
The American Institute of CPAs (AICPA) and the Chartered Institute of Management Accountants (CIMA) have launched a Business Resilience Toolkit. The resource is designed to help finance professionals and business leaders navigate the complexities of the current economic landscape. The launch comes at a time when businesses are facing various challenges including fluctuating economic conditions, geopolitical strife and technological disruptions. The toolkit provides a suite of resources that includes frameworks, actionable tools and questions designed to prompt deeper analysis. These materials are intended to assist organisations in three primary areas: scanning the external environment for potential risks; assessing the impact of economic changes on their operations; and adjusting strategies to remain robust in the face of uncertainty, while also identifying new opportunities for growth. The toolkit addresses several key themes such as comprehending economic and policy risks, integrated thinking within organisations, tracking critical performance drivers, and enabling a swift and informed response to changes. The toolkit insights are also applicable to business leaders, enabling them to evaluate the repercussions of market conditions on their company's strategy. AICPA and CIMA business growth & engagement EVP Tom Hood said: 'With record numbers of businesses failing or under financial pressure, access to strong financial management expertise can make the difference between survival and failure. Financial business partnering is essential to navigating uncertainty. 'The Business Resilience Toolkit equips accounting and finance professionals to act as strategic advisors and critical business partners.' Recently, the AICPA reported that 32% of Americans are potentially unprepared for financial disruptions that could result from natural disasters. "AICPA and CIMA unveil new resilience toolkit for finance leaders " was originally created and published by The Accountant, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
