Does the Best Annuity For You Really Exist? And If So, Where Is It Hiding?
If you’ve been searching high and low for the best retirement annuity on the planet, we’ve got some bad news for you…
You’re not going to find it!
In fact, here’s a spoiler alert:
There is no such thing as the best annuity!
So, why do all insurance companies that offer annuities say that they have the best annuities for you?
There are actually a few good reasons for that.
Why All Insurance Companies SAY They Have the Best Annuity
With people living longer lifespans these days, insurance companies – the primary offerors of annuities – are literally fighting for the business of retirees and pre-retirees who are looking for a way to secure an ongoing income in retirement.
Because it is becoming more and more common for people to spend 20 or more years in retirement, many of the “traditional” methods of generating ongoing income just aren’t cutting it anymore.
For instance, many retirees over the years have turned to the “4% Rule.” This, in a nutshell, entails withdrawing 4% of your portfolio each year to use for your day-to-day spending in retirement.
Back in the 1980s and 1990s, when the stock market was (usually) flying high, and interest rates were firmly entrenched in the double digits, taking a measly 4% out of your portfolio still allowed most retirees to continue growing what was left in the portfolio, and to live a comfortable existence for the remainder of their lives.
But fast forward to today when you’re hard pressed to find anything that pays 1% or 2% guaranteed, much less 10% or more, and the ol’ “4% rule” starts to lose its luster.
Given that, these types of strategies that are so reliant on what the market and/or interest rates do in the future are just simply not viable anymore – especially if you don’t happen to have a crystal ball that lets you know what will occur in the financial arena down the road. And because of this, you essentially run the risk of running out of money before “running out of time.”
Is that a bet you really want to take on?
Most people’s answer to that question is a solid “No.”
Enter the income annuity.
Annuities Pros and Cons
One of the most enticing features about annuities is their ability to keep cranking out income, month after month, year after year, regardless of how long you may need it. In fact, it is this feature alone that has put many retirees’ income fears to rest, alleviating the “running out of income” concern.
And, while insurance companies continue to add more bells and whistles to their annuity products, the reality is that you need to keep your sights set on the real reason you’re looking for one in the first place.
Otherwise, you could easily lose track, and end up making a long-term commitment on a product that isn’t right for you – and one that can be pretty expensive to get out of if you decide that you want to jump ship down the road.
With that in mind, knowing what you’re looking for BEFORE you purchase an annuity can help to better ensure that you will end up with the best one for YOU…which is what really matters when you are planning your financial future.
What Really Matters When You’re Searching for the Best Annuities in the Market
Just like searching for any other product or service, there are some factors that really matter when you are looking for the best annuity – and there are also, of course, some criteria that may look and sound pretty cool, but that have absolutely no bearing on accomplishing the goal (or goals) that you have for the annuity.
With that in mind, shopping for the right annuity can require you to steer clear of “shiny object syndrome” and keep a keen eye on what will do the job you need it to do.
Here’s a good example. If you’re out looking for a new car, it’s likely that a shiny red sports car is much more apt to catch your eye than a more basic sedan.
But here’s a question to ask yourself. If both vehicles will get you from Point A to Point B, why would you spend more on the sports car when the other option will accomplish the very same task?
Sure, the sports car may come with multiple stereo speakers, a built-in DVD player, and all sorts of (expensive) options. But when push comes to shove, none of those will get you to and from your destination any better than the other option…and the other option is a lot more likely to perform exactly the way you expect it to.
How to Make the Complex Simple When It Comes to Annuities
Admittedly, annuities can be highly complex products – and because of this, there are two roads that annuity shoppers will oftentimes take when trying to figure out which one to purchase.
One is to run screaming in the opposite direction, in order to relieve the “sting” of reading endless reams of “fine print.” Sure, all of the information that you want about the annuity is likely buried somewhere in there – but who has hours and hours available to read it?
The other alternative is to move forward with the purchase of an annuity that offers a long list of awesome sounding features, such as an income account, a high roll-up rate, an enhanced death benefit, and all sorts of other add-ons and riders…many of which you either do not need, or you do not fully understand, which in turn can lead to disappointment when the annuity doesn’t perform the way you thought that it would.
There is, however, the third option. That is to discuss your available options with an unbiased annuity expert who can walk you through the product’s inner workings – step-by-step in easy-to-understand language so that you know whether or not the product is really the best one for you.
In doing so, they can also compare several different annuity options, and show you exactly how each one works – and how they work in relation to one another.
This could mean starting at square one and going over fixed, indexed, and/or variable annuity pros and cons. Or alternatively, it could mean zeroing in on just one or two annuity product possibilities.
There are a lot of different types of annuities that are available in the marketplace today. So, it is important to have a good handle on which each one of these does, and what they may – or may not – do to get you closer to meeting your specific objectives.
At Annuity Gator, our mission is to help people find the very best annuities available. We offer the largest sources of annuity reviews online. So if you have a question about a specific annuity – or you simply want a general overview of how an annuity can help you reach your financial goals – Contact Annuity Gator, toll-free, at (888) 440-2468, or feel free to reach out to us through our secure online contact form here.