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Would it be wise to put money into an annuity?

Annuities are a common type of retirement income security product. You might be able to add on features and riders tailored to your specific needs, but doing so will undoubtedly cost you more money and leave you with less than if you had invested it elsewhere. Keep in mind that annuity salespeople typically earn very high commissions. To discuss your options for annuity and retirement planning, you may wish to consult a financial planner. How does an annuity operate, and what is it? An annuity is a financial agreement between an insurance company and a person that provides the paying party with a guaranteed and ongoing stream of income beginning at some point in the future. Each annuity is paid for either in whole at the outset or through a series of installments made by the annuitant. An instant annuity begins payments immediately, as the name implies, while a deferred annuity delays payments until a later date. Each person has unique financial requirements; thus, annuities can take various forms. Payment terms could be permanent or time-limited. In addition to the fixed and variable annuity structures, there are two others. Investment returns from a fixed annuity are guaranteed to remain constant over the contract’s duration. By selecting an index option, you can choose to have your annuity payments tracked by a market or stock market index fund. With a variable annuity, your money is invested by the insurance company you purchase the annuity from into various funds and accounts, and you get payments dependent on the performance of those funds and accounts. The annuity’s investments may be within your control if you have a convertible contract. However, it’s also possible for losses to occur in a bear market. Would it be wise to put money into an annuity? There are many good arguments against annuities, but you should also examine the benefits if your circumstances and financial goals are in line with the insurance companies. An annuity guarantees a monthly income. An annuity is a safe investment since the insurer must pay the agreed amount even if the market crashes. If the insurance company fails, you may get nothing. Therefore, only work with reputable insurance companies. Smart annuities offer versatile money management solutions. Minimum income benefits ensure a stable income even if the market crashes. If your husband is still alive, you can continue payments using a “spousal provision.” The death benefit clause allows the annuitant’s dependents to collect money after death. An annuity is not a good investment if you plan to retire on your own. However, there are situations in which this type of investment might be a terrific supplement to a more comprehensive retirement strategy. An annuity may be a viable alternative for those who have exhausted all other retirement savings avenues. An annuity may also be a good option if your contribution is sizable. A fixed annuity payment schedule can help you delay spending the money until you need it. In such a circumstance, you might wish to consider purchasing a fixed-rate annuity. What to look out for in an annuity, and why they may not be the best choice Annuities are frequently criticized. Their returns may be lower than more straightforward methods. Those wanting to rely on a delayed annuity for retirement should consider an IRA or 401(k). Other retirement accounts offer better returns for the same or lower expenses. Annuities’ higher fees are a key drawback. Insurance premiums often exceed donations. Maintenance and operation are usually extra costs. This multiplies the final price and diminishes your savings or earnings. Financial advisors and brokers earn more commissions than other retirement accounts. They average 7%. Annuities are an obvious source of retirement income for marketers. Early annuity withdrawals may be penalized. Individuals may see this when they have an acute financial necessity and must withdraw money from their annuity early. Tax-deferred annuities may have a 10% early withdrawal penalty. Other retirement plans may have comparable drawbacks. Conclusion Annuities are difficult. To decide if an investment is wise, various variables must be considered — age, retirement savings, goals, etc. Annuities are expensive and don’t compare well to other retirement solutions. Even so, an annuity may be a smart financial option. An annuity may be a good choice if you’ve maxed out your retirement assets or want to stretch out a hefty lump sum payment. If not, investigate other retirement choices.

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Helping people plan a secure financial future > REDUCE YOUR TAXES > CUT YOUR INVESTMENT COSTS > PLAN YOUR RETIREMENT > MEDICARE SOLUTIONS MADE EASYWE HELP OUR CLIENTS CONSERVATIVELY MANAGE THEIR INVESMENTS AND MAXIMIZE THEIR RETIREMENT INCOME.FRANK URBAN is a well-known financial speaker and educator in Charleston, South Carolina, and is President and Founder of The URBAN Advisory Group LLC, A Registered Investment Advisor, URBAN Healthcare Solutions For Seniors and is a Federal Employee Benefits Specialist. His expertise is helping retirees and those soon to retire avoid common, costly financial mistakes. For over 30 years Frank has been advising retirees and pre-retirees, including past & present employees of the U.S. Government, Veterans and their families, and many past and current owners and employees of local businesses as well as those from out of the area who choose to relocate to Charleston.He is/has been a member of the National Ethics Bureau, an organization that promotes consumer confidence by providing a source to verify business ethics for financial and insurance advisors. Frank has lectured widely on financial topics, hosted a Safe Money and Retirement Radio Show on WTMA 1250AM and speaks regularly to investors in greater Charleston and the surrounding areas. He attended Northeastern University and served in the United States Marine Corps. Frank has 4 children, 9 grandchildren and 9 great-grandchildren and lives West of the Ashley with his wife Donna. Office: (843)556-7400 Email: [email protected] Cell: (843)729-8667

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Frank Urban

Helping people plan a secure financial future > REDUCE YOUR TAXES > CUT YOUR INVESTMENT COSTS > PLAN YOUR RETIREMENT > MEDICARE SOLUTIONS MADE EASY WE HELP OUR CLIENTS CONSERVATIVELY MANAGE THEIR INVESMENTS AND MAXIMIZE THEIR RETIREMENT INCOME. FRANK URBAN is a well-known financial speaker and educator in Charleston, South Carolina, and is President and Founder of The URBAN Advisory Group LLC, A Registered Investment Advisor, URBAN Healthcare Solutions For Seniors and is a Federal Employee Benefits Specialist. His expertise is helping retirees and those soon to retire avoid common, costly financial mistakes. For over 30 years Frank has been advising retirees and pre-retirees, including past & present employees of the U.S. Government, Veterans and their families, and many past and current owners and employees of local businesses as well as those from out of the area who choose to relocate to Charleston. He is/has been a member of the National Ethics Bureau, an organization that promotes consumer confidence by providing a source to verify business ethics for financial and insurance advisors. Frank has lectured widely on financial topics, hosted a Safe Money and Retirement Radio Show on WTMA 1250AM and speaks regularly to investors in greater Charleston and the surrounding areas. He attended Northeastern University and served in the United States Marine Corps. Frank has 4 children, 9 grandchildren and 9 great-grandchildren and lives West of the Ashley with his wife Donna. Office: (843)556-7400 Email: [email protected] Cell: (843)729-8667

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