This is not only a shameless ploy to ride on the coat tails of the upcoming Super Bowl buzz but also a chance to mention the importance an IA could play in many people’s futures. Guaranteed income from an annuity is a viable option for many pre-retirees and retirees.
The product is not a cure all nor should it be the sole product in a much needed retirement arsenal. The basic concept is to put a decent chunk of money, the more the merrier, into an IA and then choose your income option and start receiving a stream of income based on certain calculations. Some factors could include the amount of money in the account, your age, whether one person or two will be depending on the money etc.
Many so-called experts will trip over themselves about the fees and costs associated with an annuity as well as the surrender charge. Yes there are fees and yes there is a surrender charge if you decide to yank your money out before a certain period of time. If you have $100,000, $50,000 or some other large chunk of money you can either keep it in a savings account, mutual fund, bonds, CD, money market account or other liquid account and slowly draw on the account during retirement. Problem is you might outlive your money and have many years to live with minimal funds. With an IA you can get a stream of money for the rest of your life, even if you outlive your original principal.
Not everyone should use this product but it is worth taking a look. Speak with a trusted advisor that can fully explain all fees, surrender charges, years before surrender charge ends, income options, beneficiary options, how much money you will receive monthly, quarterly or yearly, the strength of the insurer backing the annuity, fixed or variable and any other question you can come up with.
Watch out for that Gorilla hiding in the room before retirement is staring you down.
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