Annuities can help you to generate a reliable, ongoing income in retirement. With more companies doing away with the traditional pension plan, these financial vehicles can allow you to create your own “personal pension” of sorts.
But annuities can also be somewhat complicated. With all of the “fine print” that is associated with annuities, it is more important than ever to have a good understanding of what exactly it is that you’re buying. Otherwise, it could be an expensive move. With that in mind, there are a few things you should do before you buy an annuity.
Annuity Buyer’s Checklist
Prior to saying “yes” to an annuity, there are some items that you should ideally consider. So, make sure that you don’t lock yourself into an annuity before completing the following annuity buyer’s checklist:
- Knowing what your short- and long-term goals are for the annuity
- Determining how the rate of return on the annuity will be calculated
- Checking to see what other benefits are included with the annuity (such as a death benefit, penalty-free withdrawal waiver for terminal illness and/or a long-term care need)
- Understanding how and when you may make withdrawals
- Reviewing the surrender charge period and percentages
- Getting a breakdown of any other charges and fees (if any)
- Knowing how long the “free look” period is so you have the option to return the annuity for a full refund
- Comparing similar annuities from several different insurance carriers
- Consulting with your tax advisor in order to identify any negative consequences of buying an annuity or changing to a different one
- Reviewing the financial strength and stability of the offering insurance company
- Working with an independent, objective annuity specialist who can guide you towards the right one for you and your specific objectives
- Asking any questions that you have so that you understand exactly what it is that you’re getting
Is an Annuity Right for You?
An annuity could be a viable option for your portfolio, based on your particular needs and goals. But there are many different types of annuities available in the marketplace today. So, it is important that you narrow down which one – if any – is best for you.
If you don’t currently have a retirement income strategy in place – or if you do have one but it may need to be updated – feel free to contact us at Annuity Gator and talk with a retirement income specialist. At Annuity Gator, our mission is to assist investors and retirees with coordinating and maximizing future income.
Talking with an Annuity Gator specialist can get you one step closer to your future retirement income goals. You can reach us by phone at (888) 440-2468 and via email by going to our secure online contact form. We look forward to assisting you with your retirement income planning.