Annuities can provide protection against future inflation

The inflation-protected annuity is an important tool for investors concerned about their retirement savings being diminished by inflation, writes Javier Espinoza. "That doesn't mean investors should buy only inflation-protected annuities, though, because annuities that aren't adjusted for inflation start out paying roughly 50% more than those that are inflation adjusted," he notes, citing data from Wade Pfau, a professor of retirement income at the American College of Financial Services.

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