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Yahoo
5 days ago
- Business
- Yahoo
The Retirement Funds Boomers Rely on Most — and Why Rising Generations Will Need a New Strategy
Whether retirement is like a sunrise on a distant horizon or you can already feel its golden rays warming your golden years, one thing is clear: Your money needs to be ready. While there are universal pillars of smart saving, such as keeping savings in a high-yield savings account, investing consistently and maintaining an emergency fund, each generation approaches retirement saving a little differently. For You: Check Out: When GOBankingRates teamed up with New York Life to understand how people are feeling about their finances today, one insight stood out. In a survey of more than 1,000 Americans ages 18 and older, only 20.81% of respondents age 65 and older said they rely on a 401(k) for income. In contrast, 43.93% said they receive income from an employer pension. If you're thinking that Gen Z or Millennials might not have the same access to pensions, you're right. The way people save for retirement is changing — and future retirees will need a more self-directed strategy. In the survey, respondents of all age groups were asked about their sources of household income. Unsurprisingly, older respondents — those in the 65-and-older group — reported high reliance on Social Security (90.17%) and pensions (43.93%). More surprising? A relatively small portion of Baby Boomers — just 20.81% — reported income from a 401(k). That figure is nearly on par with the catch-all category of 'other savings.' But that may not be shocking to those familiar with how retirement planning has evolved. As retirement writer Donna Fuscaldo noted in a piece for Kiplinger, 'For many of the baby boomers' working years, they had access to pensions and a strong job market. They didn't have to worry about where their income in retirement would come from.' Explore More: Fuscaldo pointed out that by the time Gen X entered the workforce in the '80s and '90s, many companies were shifting away from pensions and toward 401(k) plans. Essentially, the onus for saving for retirement began falling to the employee instead of the employer. Boomers also came into, and out of, the workforce during a time when Social Security largely seemed secure, or at least, not something they had to worry about long-term, giving them one more reason to feel financially secure in retirement. It's only natural that younger generations — Millennials, Zoomers, and even Gen X — rely mostly on income from their current jobs. While they're not withdrawing from their retirement accounts just yet, it's worth noting that 12.78% of respondents aged 55-64 reported 401(k) income, just eight percentage points below the 65-and-older group. As pensions become less prevalent, especially in the private sector, younger generations are expected to lean more on the 401(k) in the future. The survey found that 16.77% of respondents ages 45-54 and 15.43% of those 35-44 reported a 401(k) as an income source. That may sound surprisingly high, especially for those under 45, but it's likely reflective of multigenerational households, where income from a parent's or older relative's 401(k) factors into the household total. Either way, the data underscores the growing importance of self-funded retirement strategies for future generations. Younger generations are also more likely to piece together income from multiple streams. Notably, 36.21% of respondents ages 18-24 said they earn money from side hustles. This age group also reported 0% participation in annuities — a traditional retirement product — compared to 11.56% of Boomers and 6.11% of respondents aged 55-64. This suggests younger Americans could stand to boost their awareness of long-term savings tools. Boomers largely benefitted from a retirement system that included pensions, stable Social Security, and less personal responsibility to actively manage long-term investments. But the same cannot be said for today's rising generations. As Fuscaldo writes, 'In the early days of 401(k)s, people weren't saving, and there wasn't a ton of information available about saving, investing and planning for retirement.' That's no longer the case. Today's workers have access to an abundance of financial education about 401(k)s and virtually every other type of financial product, but they also face more responsibility. And many are skeptical about the long-term viability of Social Security. According to the Nationwide Retirement Institute, 45% of Gen Z and 39% of Millennials believe they'll never see the Social Security benefits they've earned. Perhaps that's why Gen Xers now on the cusp of retirement, as well as Millennials and Zoomers, are embracing new and diverse ways of saving for retirement, from 401(k)s to side hustle savings to life insurance with cash value components. The retirement playbook has changed. And while Boomers may have been able to count on a few key institutions, rising generations will have to get more creative, more informed, and more proactive about their financial and New York Life Insurance surveyed 1,009 Americans aged 18 and older from across the country between March 19 and March 125, 2025, asking twenty-one different questions: (1) What is your current employment status?; (2) Which of the following category or categories best describes your race or ethnicity? (If more than one category applies, please select all that apply); (3) What are the source(s) of income for your household? (Please select all that apply); (4) Please choose the approximate level of investible assets for your household; (5) Using the scale below, how do you feel about the following statement: 'I often take the opportunity to discuss my knowledge of financial products or services with others'; (6) Using the scale below, how do you feel about the following statement: 'I regularly read financial news or financial publications'; (7) Using the scale below, how do you feel about the following statement: 'Thinking about my future sometimes keeps me up at night'; (8) Using the scale below, how do you feel about the following statement: 'I have enough money to live the way I would like to'; (9) Using the scale below, how do you feel about the following statement: 'I believe that The American dream is within reach for people like me'; (10) Using the scale below, how do you feel about the following statement: 'Stories in the media sometimes make me nervous about my financial future'; (11) Using the scale below, how do you feel about the following statement: 'I can't really take risks in my life because I don't have a safety net if things go wrong'; (12) Thinking about the nation's economy, how would you rate economic conditions today?; (13) A year from now, do you think that during the next twelve months we'll have good times financially, or bad times, or what?; (14) Compared to 6 months ago, how has your level of uncertainty changed regarding the following societal and economic issues?; (15) Do you own any of the following products? (Please select all that apply); (16) Do you currently have a financial plan?; (17) On a 1 to 10 scale, where 1 means not at all confident and 10 means completely confident, how confident are you that you will meet your financial goals?; (18) What kind of financial professional have you worked with? (Please select all that apply); (19) Using the slider below, please indicate which statement best describes you.; (20) Using the slider below, please indicate which statement best describes you.; and (21) Using the slider below, please indicate which statement best describes you. In order to take the survey the respondents had to pass two screener questions (S1)Who is the primary financial decision-maker in your household? with the answer being they were at least involved in the households financial decision making and (S2) Which range best describes your total annual household income before taxes? with an answer above $50K. GOBankingRates used PureSpectrum's survey platform to conduct the poll. More From GOBankingRates 4 Things You Should Do When Your Salary Hits $100K If a Financial Advisor Doesn't Ask These 5 Questions in Your Consult, Keep Shopping 5 Steps to Take if You Want To Create Generational Wealth Robert Kiyosaki: 5 Money Habits of People Who Retire Early This article originally appeared on The Retirement Funds Boomers Rely on Most — and Why Rising Generations Will Need a New Strategy
Yahoo
5 days ago
- Business
- Yahoo
The Retirement Funds Boomers Rely on Most — and Why Rising Generations Will Need a New Strategy
Whether retirement is like a sunrise on a distant horizon or you can already feel its golden rays warming your golden years, one thing is clear: Your money needs to be ready. While there are universal pillars of smart saving, such as keeping savings in a high-yield savings account, investing consistently and maintaining an emergency fund, each generation approaches retirement saving a little differently. For You: Check Out: When GOBankingRates teamed up with New York Life to understand how people are feeling about their finances today, one insight stood out. In a survey of more than 1,000 Americans ages 18 and older, only 20.81% of respondents age 65 and older said they rely on a 401(k) for income. In contrast, 43.93% said they receive income from an employer pension. If you're thinking that Gen Z or Millennials might not have the same access to pensions, you're right. The way people save for retirement is changing — and future retirees will need a more self-directed strategy. In the survey, respondents of all age groups were asked about their sources of household income. Unsurprisingly, older respondents — those in the 65-and-older group — reported high reliance on Social Security (90.17%) and pensions (43.93%). More surprising? A relatively small portion of Baby Boomers — just 20.81% — reported income from a 401(k). That figure is nearly on par with the catch-all category of 'other savings.' But that may not be shocking to those familiar with how retirement planning has evolved. As retirement writer Donna Fuscaldo noted in a piece for Kiplinger, 'For many of the baby boomers' working years, they had access to pensions and a strong job market. They didn't have to worry about where their income in retirement would come from.' Explore More: Fuscaldo pointed out that by the time Gen X entered the workforce in the '80s and '90s, many companies were shifting away from pensions and toward 401(k) plans. Essentially, the onus for saving for retirement began falling to the employee instead of the employer. Boomers also came into, and out of, the workforce during a time when Social Security largely seemed secure, or at least, not something they had to worry about long-term, giving them one more reason to feel financially secure in retirement. It's only natural that younger generations — Millennials, Zoomers, and even Gen X — rely mostly on income from their current jobs. While they're not withdrawing from their retirement accounts just yet, it's worth noting that 12.78% of respondents aged 55-64 reported 401(k) income, just eight percentage points below the 65-and-older group. As pensions become less prevalent, especially in the private sector, younger generations are expected to lean more on the 401(k) in the future. The survey found that 16.77% of respondents ages 45-54 and 15.43% of those 35-44 reported a 401(k) as an income source. That may sound surprisingly high, especially for those under 45, but it's likely reflective of multigenerational households, where income from a parent's or older relative's 401(k) factors into the household total. Either way, the data underscores the growing importance of self-funded retirement strategies for future generations. Younger generations are also more likely to piece together income from multiple streams. Notably, 36.21% of respondents ages 18-24 said they earn money from side hustles. This age group also reported 0% participation in annuities — a traditional retirement product — compared to 11.56% of Boomers and 6.11% of respondents aged 55-64. This suggests younger Americans could stand to boost their awareness of long-term savings tools. Boomers largely benefitted from a retirement system that included pensions, stable Social Security, and less personal responsibility to actively manage long-term investments. But the same cannot be said for today's rising generations. As Fuscaldo writes, 'In the early days of 401(k)s, people weren't saving, and there wasn't a ton of information available about saving, investing and planning for retirement.' That's no longer the case. Today's workers have access to an abundance of financial education about 401(k)s and virtually every other type of financial product, but they also face more responsibility. And many are skeptical about the long-term viability of Social Security. According to the Nationwide Retirement Institute, 45% of Gen Z and 39% of Millennials believe they'll never see the Social Security benefits they've earned. Perhaps that's why Gen Xers now on the cusp of retirement, as well as Millennials and Zoomers, are embracing new and diverse ways of saving for retirement, from 401(k)s to side hustle savings to life insurance with cash value components. The retirement playbook has changed. And while Boomers may have been able to count on a few key institutions, rising generations will have to get more creative, more informed, and more proactive about their financial and New York Life Insurance surveyed 1,009 Americans aged 18 and older from across the country between March 19 and March 125, 2025, asking twenty-one different questions: (1) What is your current employment status?; (2) Which of the following category or categories best describes your race or ethnicity? (If more than one category applies, please select all that apply); (3) What are the source(s) of income for your household? (Please select all that apply); (4) Please choose the approximate level of investible assets for your household; (5) Using the scale below, how do you feel about the following statement: 'I often take the opportunity to discuss my knowledge of financial products or services with others'; (6) Using the scale below, how do you feel about the following statement: 'I regularly read financial news or financial publications'; (7) Using the scale below, how do you feel about the following statement: 'Thinking about my future sometimes keeps me up at night'; (8) Using the scale below, how do you feel about the following statement: 'I have enough money to live the way I would like to'; (9) Using the scale below, how do you feel about the following statement: 'I believe that The American dream is within reach for people like me'; (10) Using the scale below, how do you feel about the following statement: 'Stories in the media sometimes make me nervous about my financial future'; (11) Using the scale below, how do you feel about the following statement: 'I can't really take risks in my life because I don't have a safety net if things go wrong'; (12) Thinking about the nation's economy, how would you rate economic conditions today?; (13) A year from now, do you think that during the next twelve months we'll have good times financially, or bad times, or what?; (14) Compared to 6 months ago, how has your level of uncertainty changed regarding the following societal and economic issues?; (15) Do you own any of the following products? (Please select all that apply); (16) Do you currently have a financial plan?; (17) On a 1 to 10 scale, where 1 means not at all confident and 10 means completely confident, how confident are you that you will meet your financial goals?; (18) What kind of financial professional have you worked with? (Please select all that apply); (19) Using the slider below, please indicate which statement best describes you.; (20) Using the slider below, please indicate which statement best describes you.; and (21) Using the slider below, please indicate which statement best describes you. In order to take the survey the respondents had to pass two screener questions (S1)Who is the primary financial decision-maker in your household? with the answer being they were at least involved in the households financial decision making and (S2) Which range best describes your total annual household income before taxes? with an answer above $50K. GOBankingRates used PureSpectrum's survey platform to conduct the poll. More From GOBankingRates 4 Things You Should Do When Your Salary Hits $100K If a Financial Advisor Doesn't Ask These 5 Questions in Your Consult, Keep Shopping 5 Steps to Take if You Want To Create Generational Wealth Robert Kiyosaki: 5 Money Habits of People Who Retire Early This article originally appeared on The Retirement Funds Boomers Rely on Most — and Why Rising Generations Will Need a New Strategy 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
Yahoo
12-05-2025
- Business
- Yahoo
Nearly 40% of Women Don't Have a Financial Plan — 3 Steps To Fix That
With every headline about a potential recession, tariff shots fired in a looming trade war, and layoffs spreading across multiple sectors, many people are anxious about their financial futures — especially women. Learn More: Check Out: It's not surprising. When GOBankingRates and New York Life teamed up to assess Americans' financial outlook and surveyed a group about their money moods, nearly 17% of women said the statement 'Thinking about my future sometimes keeps me up at night' described them perfectly. An additional 22.4% said the statement strongly resonated, though to a slightly less intense — but still significant — degree. Despite these fears, nearly 4 in 10 women who responded to the survey admitted that they didn't have a financial plan. That gap makes sense when you consider that many women and girls haven't been encouraged to learn about money management from a young age. The good news is, there's always time to learn, and it doesn't have to feel overwhelming. One of the smartest things you can do to pave a path toward a brighter financial future is simply learning about personal finance. It's one thing to know you need a budget, and quite another to understand exactly how you should go about creating one that actually works for your lifestyle and goals. Understanding how debt works can help you come up with a plan to tackle it. And beyond immediate problem-solving, financial literacy empowers you to set long-term goals and develop the skills to meet them. For You: Once you know what a high-yield savings account is, you'll understand why it's wise to earn interest on the money you set aside — whether for a vacation, a new car, medical care for your pet, or your emergency fund. Financial literacy can also make you more confident in your use of different financial products, like life insurance, to help achieve your short- and long-term goals — from buying a home to creating generational wealth for your family. No financial plan is complete without a clear vision for the future. Think of it as a road map showing where you want to be in five, 10, or even 30 years. While paying off debt and building your savings are essential, it's just as important to develop strategies that generate passive income over time — especially through long-term investments. A strong foundation should include diversified investments, such as index funds or target-date funds, which can help reduce risk while building wealth. Retirement planning is also critical. Make sure your strategy includes a 401(k) (especially if your employer offers a match) and consider adding a traditional or Roth IRA. As you focus on these pillars of retirement planning, you can also shore up other avenues of retirement income, like annuities and permanent life insurance. Knowing you've laid the groundwork to support yourself in retirement can go a long way toward easing financial anxiety — and help you sleep a little better at night. There are so many avenues to explore on that road to financial security, and trying to navigate them all can feel overwhelming. It's easy to see why so many people freeze in place or give in to anxiety. But here's the thing: You don't have to do it alone. Consulting with a professional like a financial advisor can help you build a financial plan tailored to your life, income and goals. They can also offer ongoing guidance and accountability as you put that plan into action. Far too many women feel financially anxious about their futures — and far too many don't have a plan in place. But with a little knowledge, some future-focused thinking, and the right expert support, women can take control of their finances and create a more secure and New York Life Insurance surveyed 1,009 Americans aged 18 and older from across the country between March 19 and March 125, 2025, asking twenty-one different questions: (1) What is your current employment status?; (2) Which of the following category or categories best describes your race or ethnicity? (If more than one category applies, please select all that apply); (3) What are the source(s) of income for your household? (Please select all that apply); (4) Please choose the approximate level of investible assets for your household; (5) Using the scale below, how do you feel about the following statement: 'I often take the opportunity to discuss my knowledge of financial products or services with others'; (6) Using the scale below, how do you feel about the following statement: 'I regularly read financial news or financial publications'; (7) Using the scale below, how do you feel about the following statement: 'Thinking about my future sometimes keeps me up at night'; (8) Using the scale below, how do you feel about the following statement: 'I have enough money to live the way I would like to'; (9) Using the scale below, how do you feel about the following statement: 'I believe that The American dream is within reach for people like me'; (10) Using the scale below, how do you feel about the following statement: 'Stories in the media sometimes make me nervous about my financial future'; (11) Using the scale below, how do you feel about the following statement: 'I can't really take risks in my life because I don't have a safety net if things go wrong'; (12) Thinking about the nation's economy, how would you rate economic conditions today?; (13) A year from now, do you think that during the next twelve months we'll have good times financially, or bad times, or what?; (14) Compared to 6 months ago, how has your level of uncertainty changed regarding the following societal and economic issues?; (15) Do you own any of the following products? (Please select all that apply); (16) Do you currently have a financial plan?; (17) On a 1 to 10 scale, where 1 means not at all confident and 10 means completely confident, how confident are you that you will meet your financial goals?; (18) What kind of financial professional have you worked with? (Please select all that apply); (19) Using the slider below, please indicate which statement best describes you.; (20) Using the slider below, please indicate which statement best describes you.; and (21) Using the slider below, please indicate which statement best describes you. In order to take the survey the respondents had to pass two screener questions (S1)Who is the primary financial decision-maker in your household? witht the answer being they were at least involved in the households financial decision making and (S2) Which range best describes your total annual household income before taxes? with an answer above $50K. GOBankingRates used PureSpectrum's survey platform to conduct the poll.5 Steps to Take if You Want To Create Generational Wealth 6 Daily Habits of Financially Secure People Proven Ways Small Business Owners Are Protecting What They've Built Beyond the 401(k): 3 Strategies To Retire Comfortably and Still Leave Money Behind This article originally appeared on Nearly 40% of Women Don't Have a Financial Plan — 3 Steps To Fix That 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
Business Insider
05-05-2025
- Business
- Business Insider
Best Annuity Companies of 2025: Compare Top Options for Every Retirement Need
Are you anxious about outliving your savings in retirement? Annuities offer a simple solution in the form of guaranteed income through periodic payments, possibly even for the rest of your life. An annuity can be a reliable retirement planning tool when combined with the best retirement plans. The best annuities provide peace of mind for current or future retirees who want to avoid prematurely running out of savings before they die. However, not all annuities are built the same, with some charging exorbitantly high fees for little payoff. Here are the best annuity companies as picked by Business Insider's editors in 2025. Best Annuities for 2025 Best Life Annuity New York Life is a top annuity company offering some of the most competitive interest rates for retirees seeking guaranteed income for the rest of their lives. The Guaranteed Lifetime Income Annuity II from NYL offers the best annuity for guaranteed lifetime income with interest rates as high as 11.42%. New York Life offers both individual and joint annuity products. Fixed-deferred and variable annuity products are also available. The Guaranteed Lifetime Income Annuity II is a single-premium, immediate annuity contract with a $10,000 minimum premium. You can receive your income monthly, quarterly, semi-annually, or yearly. Another annuity to consider is the Guaranteed Future Income Annuity II, which provides deferred income payments for life beginning on your chosen date. This contract has a $5,000 minimum premium. Depending on your age and circumstances, certain payment options and withdrawal features are available to customize your annuity to suit your financial needs. For example, NYL allows you to withdraw up to 100% of the discounted value of the remaining guaranteed payments when you reach 59 ½, but only during a guaranteed payment period. You can add optional features, such as increasing income payments by 1% to 3% each year to combat inflation over time. New York Life is beginner-friendly, offering various educational resources like blog posts, webinars, and even a podcast about annuities as retirement strategies. Pros of New York Life Annuities: Cons of New York Life Annuities: Best Variable Annuity Nationwide Annuities is the best annuity provider for variable annuities due to its large selection of products, including commission-based, investment-focused, advisory, and fee-based variable annuities. Its variable annuities also have competitively low fees and premiums. Nationwide variable annuities grow tax-deferred and have over 100 variable investment options. Variable annuities typically incur high fees because of underlying fund expenses, mortality and expense fees (M&E), and administrative costs, which average 2%-3% annually. However, Nationwide variable annuities have fees that range from 0.30% to 1.50%, depending on the contract (not including riders). In comparison, MassMutual's variable annuities charge a separate account fee ranging from 1.18% to 1.50% on top of an M&E fee ranging from 1% to 1.5%. Premiums for Nationwide's variable annuity contracts are also low. For example, the Soloist annuity has an initial $300 premium, and the Best of America IV has no minimum investment requirement for buyers with a qualified 401(k) or similar plan ($1,500 minimum for non-qualified buyers). Other variable annuity premiums from Nationwide range from $3,000 to $25,000, with most initially requiring at least $10,000. In addition, most Nationwide variable annuities (excluding the Destination Future annuity) include a premium-enhanced death benefit rider for no extra charge (usually 0.50 to 0.95% annually). This ensures that after you die, your beneficiaries will receive at least the amount you invested, regardless of market performance. Other fees still apply. Pros of Nationwide Annuities: Cons of Nationwide Annuities: Gainbridge is a digital life insurance and annuity provider that offers low-cost and accessible fixed annuity contracts to help people grow and extend their retirement savings. Its annuity products offer principal protection on initial deposits with a fixed interest rate ranging from 5.45% to 5.80% APY, making it the best provider of fixed annuities. You can purchase a Gainbridge annuity for as little as $1,000 as a lump sum. However, you earn the highest interest rates on initial investments of $100,000 or more. Since interest rates are fixed, you never earn less than your contract's minimum guaranteed interest rate. Gainbridge doesn't charge annual fees or commissions on its annuity products, making it a top provider for fee-conscious investors. However, surrender charges (starting at around 3%) and early withdrawal penalty fees may apply. If you withdraw more than the free amount or full surrender from a SteadyPace annuity, you may be charged a market value adjustment. Gainbridge offers tax-deferred and non-tax-deferred contract options with terms ranging from 3 to 10 years. At the end of your contract term, you can withdraw your full annuity amount (including the principal) or convert your funds into an income stream for a set period or even the rest of your life. You also have the option of renewing your contract for another term. Earnings in your SteadyPace annuity are tax-deferred. There's flexible liquidity: You can withdraw a portion of the growth penalty-free each year, but not your principal payment. Pros of Gainbridge Annuities: Minimum guaranteed interest rate up to 5.80% Low $1,000 minimum investment requirements No annual fees or commission Financial Strength rating of A- from AM Best Cons of Gainbridge Annuities: Limited product selection No immediate, variable, or indexed annuities Gainbridge review Best Immediate Annuity MassMutual Annuities' RetireEase single premium, fixed annuity is the best for immediate income. With a one-time initial deposit of $10,000, it locks in guaranteed payouts within 13 months of purchasing. After, buyers can start receiving payouts monthly, quarterly, semi-annually, or annually. Income annuities provide guaranteed, tax-efficient income without market risk. MassMutual's RetireEase annuity can provide income for a set period or the rest of your life. You can purchase up to the maximum age of 85. In addition to its RetireEase income annuity, MassMutual offers deferred fixed annuities, variable annuities, fixed index annuities, and deferred income annuities. All of MassMutual's annuities include lifetime income options. However, certain MassMutual income and deferred income annuity contracts don't include death benefits. To purchase an annuity with MassMutual, you must call and consult with one of the company's financial professionals. They consider your entire financial picture and recommend products to fit your situation. Pros of MassMutual Annuities: Can't purchase an annuity online Best Deferred Annuity Allianz Life Annuities offers a wide selection of fixed index and registered index-linked annuities that prioritize creating tax-deferred income streams with limited market risk. Allianz's deferred annuities are geared toward pre-retirees in their 40s and 50s who want to lock in a guaranteed income stream and growth rate for their retirement, but aren't ready to start earning the payments. A deferred annuity doesn't provide income immediately. Instead, payments are deferred until a later time, often several years or decades later. Allianz Life offers the best deferred annuities due to its multiple contract options, premium bonuses, optional income riders, and flexible withdrawal opportunities. The growth earned in a deferred annuity combats inflation and the increased cost of living. Deferred annuities are often fixed, so you have a guaranteed rate of return. In addition to deferred fixed annuities, Allianz offers variable and index deferred annuities. For example, the Allianz 360 annuity can be purchased starting at age 40 and generates tax-deferred growth over time based on the index option and crediting method you choose. The longer the money is left to grow, the bigger your payments will be. Just like a traditional IRA or 401(k) plan, the money invested in your Allianz Life annuity is tax-deferred, so you won't pay tax until you withdraw. Allianz also offers a Benefit Control annuity with greater liquidity access, which most insurance companies lack. This makes Allianz Life a strong choice for potential buyers concerned about locking their money up for several years. The Benefit Control annuity is designed to accumulate growth from your chosen allocations for a steady income stream in retirement. But it can be turned into an immediate annuity for those age 50 or older. With Allianz Life, premiums range from $10,000 to $20,000. Fixed annuities have no contract fees, but registered index-linked annuities charge a $50 annual maintenance fee. Pros of Allianz Annuities: Equitrust Annuities offers a diverse selection of equity-index annuity contracts that grow based on the performance of a popular underlying index, such as the S&P 500 or Barclays Focus50 Index. Equitrust provides downside protection, withdrawal flexibility, and premium bonuses, making it the best provider of equity-index annuities. The initial premium minimum ranges from $5,000 to $10,000. Certain contracts, like the MarketPower Bonus Index Annuity, provide a 10% premium bonus added immediately to your annuity's accumulation value. Similarly, the MarketTend Bonus Annuity offers a 6% premium bond on premiums paid in the first five years. Annuity contracts include downside protection, which shields your accumulated value from market downturns so you only benefit from market growth. In addition, Equitrust fixed index annuities have a guaranteed return rate that never dips below the preset minimum. Equitrust offers flexible access to your money, allowing you to withdraw up to 10% of the accumulated value each year without penalty. Equitrust annuities include Death Benefits, a Nursing Home waiver, and a Terminal Illness Rider for no additional charge. These riders give you greater flexibility over your funds for major life events. With an Equitrust index annuity, your rates are reset yearly or every two years. Accumulated growth is tax-deferred with a 10-year surrender charge schedule. Pros of Equitrust Annuities: Flexible, penalty-free withdrawal period with built-in riders in case of illness, death, or the owner being moved into a nursing home Low $5,000 to $10,000 initial premium minimums Best Multi-Year Guaranteed Annuity (MYGA) Athene Annuities, one of the largest annuity providers in the US, offers a range of affordable fixed and index-linked annuities with multi-year strategies that lock in a set growth rate during your term period (three, five, or seven years). Earnings meet or exceed the contracted minimum but never exceed the guaranteed rate. Multi-year guaranteed annuities (MYGA) lock in a specific guaranteed interest rate for a set term. MYGAs are usually deferred annuities. Rates and terms for annuity contracts with Athene's MYGA strategy are as follows: Athene's initial premiums range from $5,000 to $1 million. You can contribute additional money afterward, but it must be at least $1,000 and not exceed $100,000 over a rolling 12-month period. Another standout perk of an Athene annuity is that it doesn't have annual contract fees. Rider fees still apply. Athene MYGAs include a flexible Withdrawal Charge period, which allows you to easily withdraw up to 10% of your annuity's accumulated value penalty-free each contract year. If you are diagnosed with a terminal illness, you can withdraw up to 100% of your annuity's accumulated value for no penalty. Many of Athene's annuities include a Death Benefit. This guarantees that designated beneficiaries get your full accumulated or guaranteed contract value, whichever is greater, if you die before you annuitize your contract. Pros of Athene Annuities: Low $5,000 initial premium No annual contract fees Penalty-free withdrawals are available during the Withdrawal Charge period Included Death Benefit for leaving a legacy Financial Strength rating of A+ from AM Best Cons of Athene Annuities: Unavailable to New York residents What Is an Annuity? An annuity is a contract between you and an insurance company that helps retirees extend their retirement savings with a reliable income stream monthly, quarterly, semi-annually, or annually. Your premium investment grows through a pre-determined interest rate (fixed annuity) or market-linked investments (variable and index-linked annuities). Depending on the type of annuity you buy, you can start receiving payments immediately or defer your payments for several years, even decades. Most annuities require buyers to be at least 59 ½ before permitting penalty-free withdrawals. Otherwise, you incur a 10% early withdrawal fee. How Annuities Work Annuities work by asking you to pay a minimum initial deposit, called a premium, that grows (often tax-deferred) through interest payments or investments. Premiums are most commonly paid as one lump sum up front, but could be deposited in smaller chunks over time in what is referred to as the accumulation phase. You start receiving payments during the annuitization phase, which can last several years for a set period or the rest of your life. Types of Annuities Explained Fixed Annuity Fixed annuities provide guaranteed growth through a fixed interest. This locks in consistent periodic income without exposure to the market, making it the best annuity type for risk-averse individuals. However, by limiting risk, fixed annuities have more limited growth potential. Variable Annuity vs. Variable Life Annuity A variable annuity accumulates growth through investments like stocks, mutual funds, and index funds. This type of annuity offers the most growth potential and the highest level of risk. However, variable annuities tend to charge higher fees. You can invest your premium in multiple subaccounts to invest in different market sectors. Like an investment portfolio, diversification across and within market sectors combats risk and volatility. A variable life annuity mixes a variable annuity with a life insurance policy for tax-deferred growth and death benefits. With a variable life annuity, you guarantee a minimum amount to go to your beneficiaries after you die. This minimum is often your total premium plus potential market gains. Fixed/Equity Index Annuities (EIA Annuity) A fixed or equity-index annuity offers the best of both worlds, providing guaranteed growth through a fixed interest rate in combination with investments in popular market indexes like the S&P 500. Although less risky than a variable annuity, index annuities still pose a level of risk. Deferred Annuity vs. Immediate Annuity A deferred annuity doesn't start giving you payments until later in life. Depending on the age you buy it and your estimated life expectancy, you can defer your annuity payments for several years or decades. Keep in mind that some annuity contracts require you to start withdrawing funds by a certain age. For example, some New York Life annuities require buyers to withdraw by age 85. Deferred annuities are best for buyers with a long time horizon who are comfortable locking in a growth rate on a portion of their retirement savings. With an immediate annuity, or single premium immediate annuity (SPIA), you start receiving payouts relatively shortly after purchasing. The insurance company usually calculates your earnings based on your age, expected number of payouts, and current interest rates. However, the name "immediate" can be misleading, as immediate annuities typically require a 12 to 13-month waiting period before providing income. An immediate annuity is best for retirees or soon-to-be retirees who need cash flow soon. Choosing the Right Annuity for Your Goals Here's how to choose the right annuity to secure retirement savings over the long term. Factors to Consider Selecting the right annuity hinges on your comfort level with risk. Variable annuities offer potentially greater returns by investing in the market, which can be beneficial for combating inflation and the increasing cost of living. However, this potential comes with the possibility of investment losses. For those who are risk-averse, a fixed annuity, with its guaranteed growth, offers a more secure path. Another factor to consider is when you want to start receiving payments. A deferred annuity is best if you don't need an income stream from your annuity until later in life. But if you want to start receiving payments in the near future, an immediate annuity is better. Ensure you also consider your entire tax situation. If your other retirement savings are also tax-deferred, such as from a traditional 401(k) or IRA, you may end up paying considerable taxes on withdrawals during your retirement. Annuity with Survivor Benefit Plan Options A survivor benefit plan option allows any remaining annuity payments to go to your designated beneficiary after death. Some annuities include this benefit automatically, while others require you to purchase a Death Benefit rider. If you have a joint and survivor annuity with a spouse, the remaining annuitant can continue earning payments at a reduced rate after the other dies. Pros and Cons of Annuities Advantages: Guaranteed income: Annuities provide guaranteed income through regular payouts, potentially even for the rest of your life. Tax-deferred growth: Most annuities are tax-deferred, like a traditional 401(k) plan, so you only pay taxes when you withdraw. Peace of mind: One of the greatest perks of having an annuity is the overall peace of mind that comes from knowing you have a guaranteed stream of income. Disadvantages Fees: Many annuities charge high fees that can diminish your earning potential. Variable and index annuities have the highest fees. Common fees are a mortality and expense risk charge (M&E), an administrative fee, a commission fee, fund expenses, and surrender charges. Moreover, riders that provide certain death and lifetime benefits have their own fees separate from the annuity itself. Liquidity limits: Annuities lock up your money for a set period. Certain annuities provide penalty-free withdrawal periods up to a certain percentage, but you generally have to be at least age 59 ½ to avoid a 10% penalty fee. Complex terms: An annuity has its own set of terms and phrases that can be confusing if you are not well-versed in insurance product lingo. Many online annuity providers provide helpful resources that walk you through all the complex terminology Best-Rated Annuity Summary Company Name Best For Account Minimum* Annual Percentage Yield (APY)** New York Life Insurance Best Life Annuity $5,000 up to 4.60% Nationwide Annuities Best Variable Annuity $1,500 up to 5.25% Gainbridge Best Fixed Annuity $1,000 up to 5.80% MassMutual Annuities Best Immediate Annuity $1,500 up to 4.65% Allianz Life Annuities Best Deferred Annuity $5,000 Unpublished Equitrust Annuities Best Equity-Indexed Annuity $10,000 up to 5.50% Athene Annuities Best Multi-Year Guaranteed Annuity $5,000 up to 5.30% *Annuity account minimums may vary by the product you select. Rates are accurate as of the publication date and subject to change. **Annuity interest rates will vary based on the product type, premium amount, and duration you select. FAQs
USA Today
22-04-2025
- Sport
- USA Today
Survey: Parents shell out $3K annually on kids sports with college, pros in mind
Survey: Parents shell out $3K annually on kids sports with college, pros in mind Show Caption Hide Caption Cooper Flagg's mom shares her best tips for parents navigating youth sports Mackenzie Salmon sat down with Cooper Flagg's mom Kelly to talk about how she successfully navigated the world of youth sports. Sports Seriously Parents spend $3,000 annually on their children's sports, the majority of them taking action elsewhere to manage rising costs, according to New York Life's Insurance's latest Wealth Watch survey. The results of the poll of U.S. adults with children aged 7 to 18 who participate on youth sports, conducted March 1 to 6, also suggest parents are pouring in money believing they are investing in an ultimate playoff. "Our research suggests that parents are deeply committed to supporting their children's athletic potential – not just for the joy of sport, but as a pathway to higher education and future success," Jessica Ruggles, corporate vice president of financial wellness at New York Life, said in a release shared with USA TODAY Sports prior to Tuesday's publication of its results. According to the nationally representative online survey of 1,036 participants whose kids play school community and travel sports, 83% of parents believe their child or children have the skills to play at the collegiate level, while 49% are confident that their child will receive an athletic scholarship and 75% believe they have the skills to play professionally despite long odds that suggest otherwise. According to 2024 NCAA data, supplemented by data from the National Federation of State High School Associations, about 6% of high school athletes play collegiately (a lower percentage play Division 1), while less than 1% of NCAA athletes are drafted into a professional sport, according to the research. "Many families are counting on athletic scholarships to ease the cost of college, yet those opportunities are limited and uncertain, especially in the face of injury or shifting priorities," Ruggles says. According to the New York Life data, parents are adjusting household budgets and dipping into savings to support them, with 76% taking some kind of action to manage costs, usually by reducing spending in other areas (38%), while 20% report that they had to reduce or stop their children's participation due to financial constraints. The Wealth Watch survey, which tracks Americans' financial goals, progress toward those goals and feelings about their ability to secure their financial futures, reflects other statistical and anecdotal evidence of a national mania over prioritizing, and even monetizing, kids sports. Parents spent 46% more on their child's primary sport in 2024 than in 2019, according to another recent survey conducted by the Aspen Institute in partnership with Utah State University and Louisiana Tech University. That's twice the rate of price inflations in the U.S. economy during the same period, according the Aspen Institute. According to research by the Aspen Institute, which regularly collects and distributes research and the latest trends in youth sports, parents spend more than $40 billion annually on their children's sports. "It all starts with, I think, with the college admissions process, plus big time money in college sports, it creates this signal that goes all the way down to eight years old, probably even earlier," bestselling author and father Michael Lewis said at Aspen's recent Project Play Summit in Berkeley, California. Project Play is Aspen's initiative to build healthy communities through sports and develop nationwide access to them. "The parents can tell themselves, 'We're doing this because you get this advantage in college,' either you get free tuition or now it's for even more, like they're going to get NIL deals and all that," said Lewis, a father and former coach of his daughter's softball team who has written two books about the youth sports experience. "It's kind of like the way people respond to way too strongly to lottery-like temptation. "Most kids are not going to get any of that, and the parents are going to spend a lot more money than they should spend chasing this dream, sometimes the kids don't even want to be there. So I mean, when you have this prize that's dangled on the other end, and very poor education all the way through, about the likelihood of getting a prize, you're going to get a lot of distortion in people's behavior. I think education is part of it." According NCSA College Recruiting, a college recruiting website that helps connect high school athletes with college coaches, fewer than 2% of high school athletes are offered athletic scholarships. While the number of scholarships could increase with the House vs. NCAA settlement, thousands of current walk-on athletes stand to lose their places on Division I teams if it is approved. "The pursuit of athletic goals can also place a real financial and emotional strain on families," New York Life's Ruggles said. "As parents make meaningful sacrifices to nurture their children's passions, it's essential to prioritize both performance and well-being. Building a trusted team – including athletic mentors and financial coaches – can give families clarity and confidence to champion their child's growth without compromising their own stability, maintaining confidence in their broader financial future." Sports parents surveyed by New York Life had an average of $30,787 saved for their children's higher education. If you're a youth sports parents with goals of reaching college, you know that annual family dues can approach that figure. "This kind of long-term investment reflects a belief in hard work and opportunity," Ruggles says. "But while hope and effort are essential, so is planning." And perhaps even a shift in our priorities. Sixty-four percent of parents in the New York Life survey reported rising costs for kids sports in recent years. Nearly all of them (99%) are actively involved in their kids' sports, attending games, practices, or managing transportation. "I think the system does not work for working families," Jennifer Siebel Newsom, the first partner of California Gov. Gavin Newsom and co-chair of the governor's council on physical fitness and mental well-being, said at the Project Play Summit. She is also a sports mom. "The cost of entering and being a part of these clubs are increasing (and it's) is an obstacle for too many families," she said. "It's also disruptive, because, as kids are playing at higher and more competitive levels, they have pressure at school academically if they're traveling all these weekends. … That's not healthy for family dynamics. "I just think we need a real pattern interrupt. We need to go back to local. We need to go back to kids playing rec sports, but like skilled rec sports, play based where they're building confidence, building skills, growing as a team player at their school or at their local rec center, so that it works for local families, isn't highly exorbitant, highly expensive."
