Which type of annuity would be most suitable for a 35-year-old factory worker concerned about inflation while planning for retirement?

The flexible premium variable annuity is designed to adapt to changing market conditions and offers the potential for growth that can outpace inflation. For a 35-year-old factory worker focusing on retirement planning, this type of annuity allows for contributions to fluctuate over time, which can be beneficial as income and investment needs change.

Additionally, variable annuities invest in a variety of subaccounts, which can include stocks and bonds, offering the opportunity for higher returns compared to fixed annuities. This performance-driven approach makes it more suitable for someone concerned about inflation, as the value of the annuity can rise with market performance, potentially providing a hedge against the eroding purchasing power of money over time.

Fixed annuities typically provide guaranteed returns, but they may not keep pace with inflation, which could jeopardize the worker's purchasing power in retirement. Immediate annuities start providing income right away, which may not align with the worker's long-term savings goals. Traditional annuities may not incorporate the investment growth potential that a flexible premium variable annuity offers. Therefore, the flexibility and growth potential of a variable annuity make it the most appropriate choice for retirement planning that considers both inflation and long-term financial goals.