Looking for an annuity is like buying a house. You need to keep what you need in mind as you shop. Just like houses, there are many different styles of annuities and some of them fit your needs better than others do. While you might find very attractive returns, if the product isn't a good fit, it's not the best annuity for your situation.
How do you decide which one is best? You start by listing the things you find important. Don't worry about spelling or making it fancy, it's only for your eyes. It's a shopping checklist to help keep you focused on your investment needs.
When do you need the funds? If you need the money for a large purchase within a year or two, an annuity may not be the best product for your situation. Most annuities are long-term investment, although some offer a surrender period of a year or less. Just like a short-term CD, you get a slightly lower interest rate. If, however, it fits your needs, then it's the right annuity for you.
You need to ask yourself whether you want an income from the money or just want to let it sit and grow tax-deferred. If you want an income, do you need one that you'll never outlive?
For those that want an immediate annuity, an income they can't outlive, the amount of payment is the most important feature. If, however, you want a place to tax defer funds and prevent taxation of Social Security, you'll look more at the immediate interest rates.
People often need products that allow for either joint ownership or annuitization. This is particularly true of couples that depend on each other's income for survival. Check to see if the company you like offers that option before you proceed.
Are you using the annuity as part of Medicaid planning? Ask for a copy of the wording of the annuity contract and take it to your attorney helping you with the planning. In an effort to make the annuity more attractive to annuitize, some contracts allow some invasion rights. While this is good for most people, those that want the bulk of the funds turned into a liquid cash stream need to know that this does not pass Medicare guidelines.
You need to know the length of the surrender period before you purchase an annuity. No matter what your original intentions, you may find that at some point, you have to have some of the money. Often policies that offer the highest rate of return often have the longest surrender period. This becomes important information if you find you have an emergency that requires a withdrawal.
Find out if the annuity you choose allows additional deposits. As people find how easy their annuity is to manage, they often combine other investments into the annuity. If the company allows subsequent investments, it keeps their financial program simpler and limits the number of products to a few.
Know what you need and what each contract offers before you make your final decision. By narrowing the field to your requirements, you'll make the decision of an annuity purchase much easier. - 31884
How do you decide which one is best? You start by listing the things you find important. Don't worry about spelling or making it fancy, it's only for your eyes. It's a shopping checklist to help keep you focused on your investment needs.
When do you need the funds? If you need the money for a large purchase within a year or two, an annuity may not be the best product for your situation. Most annuities are long-term investment, although some offer a surrender period of a year or less. Just like a short-term CD, you get a slightly lower interest rate. If, however, it fits your needs, then it's the right annuity for you.
You need to ask yourself whether you want an income from the money or just want to let it sit and grow tax-deferred. If you want an income, do you need one that you'll never outlive?
For those that want an immediate annuity, an income they can't outlive, the amount of payment is the most important feature. If, however, you want a place to tax defer funds and prevent taxation of Social Security, you'll look more at the immediate interest rates.
People often need products that allow for either joint ownership or annuitization. This is particularly true of couples that depend on each other's income for survival. Check to see if the company you like offers that option before you proceed.
Are you using the annuity as part of Medicaid planning? Ask for a copy of the wording of the annuity contract and take it to your attorney helping you with the planning. In an effort to make the annuity more attractive to annuitize, some contracts allow some invasion rights. While this is good for most people, those that want the bulk of the funds turned into a liquid cash stream need to know that this does not pass Medicare guidelines.
You need to know the length of the surrender period before you purchase an annuity. No matter what your original intentions, you may find that at some point, you have to have some of the money. Often policies that offer the highest rate of return often have the longest surrender period. This becomes important information if you find you have an emergency that requires a withdrawal.
Find out if the annuity you choose allows additional deposits. As people find how easy their annuity is to manage, they often combine other investments into the annuity. If the company allows subsequent investments, it keeps their financial program simpler and limits the number of products to a few.
Know what you need and what each contract offers before you make your final decision. By narrowing the field to your requirements, you'll make the decision of an annuity purchase much easier. - 31884
About the Author:
Christopher Paul writes content for best annuity - a growing site committed to providing people with unbiased information and advice for their retirement. We provide constantly updated information on market conditions, the benefits, and the myths agents will tell you when looking for annuity insurance.
