Ask an Advisor: Is Putting 50% of My Portfolio Into Annuities Too Aggressive?

Core Insights - The article discusses the considerations for allocating a significant portion of a portfolio, specifically over 50%, to annuities, emphasizing the need for personalized financial advice based on individual circumstances [2][3]. Group 1: Reasons to Invest in Annuities - Guaranteed income is a primary reason for purchasing an annuity, providing a steady stream of payments similar to pensions or Social Security benefits [5][7]. - An immediate annuity allows individuals to exchange a lump sum for regular monthly payments for life, addressing concerns about outliving savings [5][7]. - The concept of an income floor is introduced, highlighting the importance of guaranteed income to cover living expenses, especially during market downturns [8]. Group 2: Considerations Against High Allocation to Annuities - If existing Social Security benefits or pension payments sufficiently cover living expenses, additional guaranteed income from annuities may not be necessary [9]. - The stability and predictability of fixed annuities are noted, as they provide guaranteed interest rates unaffected by market volatility, contrasting with other investment vehicles [9].