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CALL US: (888) 440-2468

have an annuity question?
have an annuity question?

5 Mistakes to Avoid When Buying an Annuity How to Ensure You’re Getting the Most for Your Money

Are you aware of the 5 mistakes to avoid when buying an annuity? If not, you shouldn’t move forward with purchasing an annuity until you do. Otherwise, it could cost you – and you definitely don’t want to gamble with your life savings.

Here are five of the biggest annuity buying mistakes that investors make:

1) Not understanding how the annuity works.

The biggest mistake people make when purchasing an annuity is not having a good understanding of how it works. While there is a long list of benefits you can attain with an annuity, there are also a few items to be aware of, such as fees, liquidity, and taxation. Make sure you know what these are before you sign on the dotted line.

2) Using money that you may need to access in the near future.

Although you can usually make small penalty-free withdrawals from an annuity in the near-term, these products typically charge surrender fees for the first several years if you take out most (or all) of your money. So, it is important to only contribute funds that you won’t likely need to access, at least during the annuity’s surrender period.

3) Not being aware of the annuity fees.

In addition to possible surrender penalties, there are other fees to be aware of, too, that pertain to annuities. For instance, you may need to pay more in premium for additional income riders or other added features. If you plan to purchase a variable annuity, you could also incur money management fees on all of its underlying investments.

4) Not purchasing the annuity from a financially stable insurance company.

Annuities are often purchased for securing a lifetime income stream so that you don’t run out of money in retirement. With that in mind, it is absolutely essential to make sure that the insurance company you’re purchasing the annuity through is strong and stable financially, and that it has high ratings from the insurer ratings agencies such as A.M. Best, Standard & Poor’s, Moody’s, and/or Fitch.

5) Not working with an annuity specialist.

Another key mistake that investors make when buying an annuity is not working with an advisor who has an in-depth understanding of exactly how annuities work – in both the short- and long-term. A specialist can walk you through the inner workings of the annuity so that you’ll know what to anticipate down the road.

Think about it like this – if you had a serious heart-related issue, would you feel more comfortable getting advice from a cardiologist, or instead from a general practitioner? While an internist may be a fantastic “quarterback,” who can help you with coordinating your overall healthcare plan, most people would choose to see a heart specialist – particularly because the condition could literally impact your life.

The same holds true when you’re planning for retirement. With more people living longer now, knowing that you’ll have an ongoing income stream to rely on for as long as you need it can be comforting. In fact, research has shown that those who have a reliable income in retirement are healthier and happier.

How to Make Sure You’re on the Right Path when Purchasing an Annuity

Having someone to guide you through the annuity buying process can help to ensure that you’ve narrowed down the right annuity for your specific objectives. That’s our focus at

We are a team of annuity experts. We’ll walk you through the process of purchasing an annuity so you know exactly what you’re getting, and what you can expect. So, feel free to reach out to us through our secure online contact form HERE. You can also contact us directly via phone at (888) 440-2468 and chat with one of our annuity specialists now.

5 Mistakes to Avoid When Buying an Annuity

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