The Boomer” is a column written for adults nearing retirement age and those already in their “golden years.” It will also promote reader interaction by posting e-mail responses and answering reader questions. E-mail your questions or topic ideas to


In the early 1970s, many states established weekly drawings for state lotteries. For $1 and a dream, we all had the chance to win that million-dollar prize. My pop was in the final drawing in 1973 and won $10,000 in a one lump-sum payment. 

State lotteries are now typically paid as annuities The winner does not receive a one lump-sum payment, but rather a payout over the course of, say, 20 years.

Obviously, hoping to win the lottery isn’t a good retirement plan. But using annuities is a good idea. 

Economic Woes Change the Retirement-Savings Game

To that end, I recently talked with Robert DeChellis, president of Allianz Life Financial Services, LLC.,  about annuities and the impact they could have for baby boomers’ retirement savings. Annuities were once a more controversial product, but DeChellis insists that times have changed. 

Boomer: What are annuities and how do they work?

DeChellis: Annuities are insurance-based contracts that essentially provide not only the opportunity to accumulate wealth on a tax-deferred basis, but, should the individual choose, they actually are a vehicle that can provide a lifetime guaranteed income, which is what makes them so unique and so attractive in this current economic environment.
Boomer: Are there tax advantages to an annuity?
DeChellis: Absolutely, as I said…you can actually accumulate wealth on a tax-deferred basis, which obviously over time has its advantages.
Boomer:  What is the advantage of an annuity investment versus a 401(k) plan?
DeChellis: I think it is sort of apples and oranges in terms of that comparison. In a 401(k), obviously you are able to save in a pretax basis and then those savings grow on a tax-deferred basis.  Some 401(k)'s are funded by annuities, some 401(k)'s are funded by mutual funds and various investments can be found inside of a 401(k). But clearly I think when you look at the similarities both have tax advantages.

So again, I would not say one is better than the other, but I think they work well together and complement one another.
Boomer: What would your specific advice be for a boomer who fears running out of money more than dying?
DeChellis: My No.1 advice to boomers, both boomers and advisors today, is to spend the time to get educated on annuities today. And I say today because there are a number of people still operating under information that is 10, 15 and 20 years old, and the innovation that has taken place with annuities just over the past five years has made such a significant difference and can have a significant impact on people now putting together strategies for retirement planning.  So first and foremost I would say dispel any of those myths that may exist today around annuities and spend the time to sit down and get educated because what you are going to find is that these vehicles can play a critical role in someone’s retirement plan and clearly be the difference between success and failure.

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