CBS NEWS: How much does a $200,000 annuity pay monthly?



How much does a $200,000 annuity pay monthly?

Read in CBS News: https://apple.news/ASYLunvc7RgOOUOEwmEZnqA

It can be tough to prepare for retirement amid today's economic uncertainty, and even retirees who've planned diligently are feeling the pressure of the current landscape. One major issue is that the stock market continues to swing unpredictably, making it increasingly difficult to use stocks and bonds to adequately prepare for retirement. Plus, everyday expenses remain stubbornly high, and traditional retirement income sources, like pensions, are less common than they used to be. In turn, there is a pressing need for older adults to identify steady, reliable income that won't disappear with the next market downturn.

For that reason, annuities are starting to look more attractive. These insurance-based products are intended to convert a chunk of your retirement savings into predictable monthly income for life. While they may not offer the same growth potential as investing in stocks or real estate, annuities are built to provide stability, which is precisely what many retirees are looking for. The trade-off is that you give up access to your principal in exchange for guaranteed checks every month.

So how much income can you actually get from an annuity? If you're thinking of investing $200,000 into this type of retirement product, there

Is a $200,000 annuity worth it?

Whether or not a $200,000 annuity is worth it depends on what you want your money to do. For many retirees, a $200,000 annuity generally isn't meant to replace all income. It's designed to complement existing benefits like Social Security, a pension or retirement account withdrawals. Here's how to think about whether it's a good fit:

A $200,000 annuity might be worth it if:

You want peace of mind. There's value in knowing exactly how much you'll receive each month, regardless of what happens in the market or to inflation (if your annuity includes an inflation rider).

You're worried about longevity risk. Annuities are one of the few tools that can help protect against outliving your money.

You don't want to manage investments. Not everyone enjoys checking the markets or rebalancing portfolios. An annuity lets you set it and forget it.

But a $200,000 annuity might not be ideal if:

You need liquidity. Once you buy an annuity, that money is typically locked in. If you need access to a large sum for a medical emergency or home repair, your annuity won't help.

You have legacy goals. Annuities prioritize income over inheritance. Unless you

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