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Annuities aren’t for everyone, but before deciding that one isn’t right for you, you should determine whether your reasons are of sound mind. Consider some bad reasons why some people decide to exclude annuities from their retirement planning.

Facing Your Own Mortality

The thought of annuities might make you upset because it forces you to consider the fact that someday you are going to die. Thinking about death is not a fun thing to do as you prepare to enjoy hopefully long, healthy decades of retirement. But the fact is that yes, someday you will die, and instead of worrying about how much time you have left, an annuity could make your retirement happier by making the most out of your savings while you are living.

Won’t Live Long Enough to Benefit

If you’re healthy going into retirement at 65, you could live another 20 years according to current life expectancy statistics. An annuity can provide you with guaranteed income even if you live longer than expected. But if you suffer from a serious health condition that will dramatically shorten your life, you might hesitate to buy an annuity. However, your spouse may be able to reap the benefits if you have a joint annuity. You may also have beneficiaries to consider.

Can’t Tap into Money for Unexpected Expenses

When investing your savings in a longevity annuity or immediate annuity, you are giving up access to those funds. If you need money for unexpected expenses or want to leave that money to your heirs, you can’t take it out of your annuity. For this reason, it is a good idea to diversify your portfolio and put only a portion of your savings into an annuity.

Learn more about bad and good reasons why people say no to annuities in this Money article. Feel free to reach out with any questions or concerns about retirement planning. My Annuity Guy offers free consultations where we can discuss the pros and cons of multiple buckets, including but not limited to annuities.