11. When should you choose an annuity or a 401(k)
Like most investments, choosing a 401(k) or an annuity is a personal decision based on your age, finances, and other individual factors. Both provide the advantage of long-term savings accumulation, tax-deferred growth, and beneficiary options.
If you are still working but haven’t hit your 401(k) contribution limits, you can buy an annuity as you near retirement. Or you can combine both. Some companies offer employees the option of putting part of their 410(k) into an annuity. By combining two you’ll receive a steady income stream in retirement from the annuity plus any upside from the 401(k) investments.
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