For a 62-year-old planning to retire in 8 months, which alternative could address the income gap if he delays Social Security?

In the context of a 62-year-old planning to retire in 8 months and considering how to address an income gap while delaying Social Security, the choice of a variable annuity aligns well. A variable annuity offers the potential for growth through investment options within the annuity contract, which can provide a source of income that may increase over time, depending on market performance.

One significant feature of a variable annuity is its flexible investment choices, allowing the individual to allocate funds into various sub-accounts that may include stocks, bonds, and other investment vehicles. This flexibility can be particularly beneficial for someone approaching retirement, as it allows for a combination of growth potential and income needs. By investing in a variable annuity, the retiree could potentially generate a higher return that assists in filling the income gap created by delaying Social Security benefits, which will increase in value the longer they are deferred.

In contrast, other options may not offer the same blend of growth potential and liquidity. For example, a fixed immediate annuity provides guaranteed income but typically starts payments right away and doesn't allow for growth through investments. In addition, index and fixed deferred annuities, while safer in terms of risk, might not provide the level of income enhancement that could be achieved