Inflation and increased medical expenses are factors that we can expect to continue to face during retirement, but we don't have to face them unprepared. Your Association believes it is important that you begin to assess your retirement income needs at an early age, and analyze the various sources of income available to meet them. Discrepancies between income needs and income sources can then be identified well in advance in order to avoid retiring with inadequate income. One investment option that is popular as a vehicle for the accumulation of retirement funds is the annuity. Annuities are contracts which can be purchased during the pre-retirement years from insurance companies to provide income for a specified period of time, usually after retirement.
Taxes are also deferred on the interest earned by the investment.
The purpose of this guide is to help you understand these popular products so that you can evaluate TDAs offered by different companies and make an informed decision regarding participation. However, the term TDA will be used throughout this guide in order to avoid the possibility of confusion with a tax-sheltered investment. The latter generally involves tax write-offs. Few people realize just how much money they will need at age 65 to provide a monthly income for life. Of course, there are many possible sources of income for your retirement years.