What is the Best Annuity for You?

Posted by Financial Adviser on November 5th, 2018

The simple answer is, the “best” annuity is one that serves all your retirement needs.  It is important that you consider what you would like to accomplish with an annuity.  Many insurance companies and annuity marketing organizations will tout their annuity products and generally their policy features and benefits are solid and well thought out.  The issue is not so much the product but which of these features and benefits suit your specific situation.

For example, if a safe, secure, regular income is a priority, the benefits of tax deferral, should have little bearing on your decision.   The same holds true for saving for retirement. If the beneficiary benefits are exaggerated then the use of an annuity may not make sense.

A simple rule to follow is: collect the facts and match your retirement needs with the benefits available.  An annuity purchase is about you and your personal situation.

A few things you should consider when looking at an annuity include, risk tolerance, income needs, long term care needs, guaranteed interest rates, payout options, inheritance, fees (if any) and other contractual features.

So what is the answer to the ‘best annuity?  It all depends on what the use of the annuity is and what you want it to accomplish.

*Tips for selecting your annuity: 

• Compare the features and rates of different annuity plans

• Know the guaranteed interest rate
• Review the annuity providers service history
• Understand the annuity contract. Does it contain surrender penalties? If so how long are they? Are the fees forgiven in the event of death?
• What are the fees or expenses, if any?
• What options are there for accessing your funds?
• Does the beneficiary receive the full value of the annuity?
• What options for income are offered in the contract?

The best tip we can give is to always take your time and make certain the annuity policy matches your expected use.

Disclaimer: Annuities are not for everyone. Please seek professional advice regarding tax liability and investing options based on your personal situation.

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Financial Adviser
Joined: September 29th, 2018
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