401k Annuity A Happy Medium Between 401Ks and Annuities

Chicago, IL (PressExposure) August 29, 2009 -- /1888PressRelease/ A 401k annuity combines the perks of both a 401k and an annuity into one solid investment. A 401k annuity allows employees to invest part of their regular 401k payments into an annuity, guaranteeing them a post-retirement income by making manageable contributions to the 401k annuity plan.

Some people would benefit more than others from a 401k annuity plan, according to the InsuranceAgents.com article, “Planning For Retirement With A 401k Annuity.”

People who would benefit the most from a 401k annuity are “Employees who don’t have a traditional pension plan in place, or who don’t want to hand over a huge sum of money to an insurance company for an annuity,” according the article.

Individuals should know though that there are both advantages and disadvantages to a 401k annuity.

With a 401k annuity, investors get to choose what the size of their contributions, allowing them to make smaller and more manageable payments. Also, you can end up paying much less than you would have if you shopped for an annuity on your own.

However, a 401k annuity has one major setback: it doesn’t allow employees to “roll over” their 401k annuity if they switch jobs, unless their new employer carries the same plan. So before investing in this kind of financial option, discuss with your accountant, financial professional or insurance agent to determine whether or not a 401k annuity is right for you.

For employees who want to seek a 401k annuity but aren’t sure how to obtain it, InsuranceAgents.com says to go straight to the source.

“If you are interested in this option, contact your employer’s 401k administrator,” to see if they offer a 401k annuity, recommends the InsuranceAgents.com article. “If this option isn’t offered, go directly to your employer. At the very least, make the suggestion to them and maybe they will be willing to adjust the current plan to be more accommodating to a 401k annuity.”

staff contribution: Meha Ahmad

Visit InsuranceAgents.com for more information.


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Press Release Submitted On: August 28, 2009 at 7:55 am
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