Fixed annuities are commonly thought of being safe investments. After all, you can’t lose money in the stock market if you’re invested in it, right? Yes, but that does not imply that they are risk-free. Even though fixed annuities are safe in terms of not losing money in the market, you should keep in mind that they have additional characteristics that could make them risky. The first is that they are cash-strapped. Although there is a tax deferral component, keep in mind that if you need the money, you may have to pay some penalties to get it. The surrender charges are what they’re called. Surrender charges on annuities can be fairly high in some cases. From a liquidity standpoint, this makes them dangerous. Another thing to think about is the insurance company’s rating. In my opinion, ratings aren’t always the be-all and end-all when it comes to safety. Merrill Lynch had Enron rated as a buy as the stock fell from its peak to single digits in a non-apple-to-apple comparison. Ratings aren’t always trusted, and insurance firms are no exception. The safety of an insurance business determines your annuity’s safety. When choosing an insurance company, it’s critical to do your homework and do it effectively. Purchase the Best Annuity for Yourself Finally, educate yourself on annuities and purchase the one that makes the most sense for you. You might have your rewards adjusted for inflation if you’re willing to pay a bit more or receive a little less, for example. You can also pay more if you’re married and acquire a combined fixed annuity that pays till both you and your spouse die. That may be a better option than purchasing a separate life insurance policy. While two single plans may provide more money while both of you are living, they will provide significantly less when one of you passes away. A 70-year-old pair may collect roughly $1,000 per month from an immediate fixed annuity for $200,000 for as long as one lives. A 70-year-old woman may receive $577 a month if she spends $100,000, compared to $641 for a 70-year-old guy. (Women typically receive less than males because they live longer.) It’s a good idea to consider a fixed annuity while you plan for retirement. Don’t rely on luck or Social Security to fund your retirement. After all, the average Social Security payment is $1,350 per month or roughly $16,000 per year. (Recently, the maximum payout for persons retiring at full retirement age was $2,639, or around $32,000 for the entire year.) If you don’t expect to be given enough Social Security income to cover all of your expenses in retirement, you’ll need to make additional arrangements.
Contact Information:
Email: [email protected]
Phone: 9143022300
Bio:
My name is Kevin Wirth and I have worked in the financial services industry for many years and I specialize in life insurance and retirement planning for individuals and small business owners, with a specialty in working with Federal Employees. I am also AHIP certified to work with individuals on their Medicare planning. You can contact me by e-mail or phone. I look forward to the opportunity of working with you on these most relevant areas of financial [email protected] 914-302-2300
