This checklist is designed to provide the basic do's and don'ts regarding Annuities so you can make an informed decision when it comes to purchasing an Annuity for your retirement.
Click each topic below for a brief description on each one!
Annuity Do's
Consider each type of Annuity
There are different types of Annuities for different goals, needs, and risk tolerance. Fixed, Variable, and Indexed Annuities are the most common types retirees utilize to create both growth and eventually retirement income. They can also be Immediate or Deferred. Research each and consult your advisor to determine which is best for you.
Know your numbers
Knowing your numbers is a crucial part of determining whether or not an Annuity is right for you, and if it is, what type and how much you should purchase. This comes down to knowing your other sources of income, as well as your current and future expenses.
Explore different providers
Each Annuity provider is different, especially when it comes to bonuses, fees, expenses, etc. Having a few options in front of you will allow you to weigh the pros and cons of each and determine which provider is best for your goals and needs.
Take advantage of bonuses
Most Annuity providers offer some type of bonus when you purchase certain types of Annuities or purchase a certain amount. For example, it's not uncommon to fund an Annuity with $100,000 and immediately be credited an additional 10% in value. That's an extra $10,000 dollars toward your Annuity!
Understand the pros and cons
Like any other financial vehicle, Annuities are not always best for everyone. For example, they can provide guaranteed income for life, but can limit your liquidity in the early years depending on how they're set up. To access your funds in case of an emergency could be expensive. Just make sure you understand exactly how your Annuity works and what the restrictions are.
Work with an advisor
Annuities are complicated financial products and should always be purchased with the help of a professional and licensed insurance agent/advisor. If you'd like, you can click the button below to request a FREE Custom Annuity Income Plan and a state-licensed agent/advisor will contact you to discuss the best Annuity options for your specific retirement goals and needs.
Annuity Don'ts
Don't rush
Purchasing an Annuity is a big financial decision and should not be rushed or taken lightly. Take your time, do your research, and work with a licensed professional that understands your needs and goals. When you've considered different options and know which one is best for you based on actual numbers and a real financial plan, only then should you move forward.
Don't overfund
Like any other financial vehicle, you never want to put all of your eggs, or most of them, in one basket. An Annuity should be a vehicle that helps you reduce risk, increase income, and diversity your portfolio, not be the sole or majority asset. When you know your numbers, you'll be able to determine how much of your portfolio should be in Annuities to help you reach your goals.
Don't feel pressured
Never ever move forward with something if it does not make sense for you, especially when it involves a large financial decision that can make a big impact on your financial well-being, like purchasing an Annuity. If you ever feel pressured to do something you don't feel comfortable with, let your agent/advisor know, or consider working with someone else.
Don't forget about inflation
Inflation is often an underestimated factor that can have a pretty significant negative impact on your retirement. That's usually because people only consider the impact of one year of inflation (2% is the standard rate). But over 10 years, that 2% inflation can really start to impact your purchasing power. So consider this important factor when determining the type and the amount of your Annuity.
Don't ignore fees and expenses
Sometimes people get too fixated on the thought of having guaranteed income for life, and forget or neglect to consider the fees and expenses associated with the Annuity they are considering. Fees and expenses are normal and to be expected. But make sure you know what they are and how they will affect the performance of your Annuity.
Don't purchase alone
It's worth repeating that purchasing an Annuity is something that is strongly recommended to do with a state-licensed professional. Having a knowledgeable agent/advisor in your corner that can help you navigate all the different products and carriers, can make a huge difference when it comes to creating the income you're looking for with an Annuity. Click the button below to request your FREE Custom Annuity Income Plan and an agent/advisor will contact you to go over your options.
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