I am a strong believer that whether or not you should use an annuity depends on your situation. That is not a popular stance to have, since those who sell annuities suggest that everyone should own an annuity, while those who sell investments tend to badmouth annuities.
Here is how I see it, when it comes to who may be a candidate for annuities:
Consider saying yes to annuities: If you are someone approaching retirement who wants to grow and PROTECT your retirement funds (from lawsuits & divorce) or simply wants to keep some of your money out of the market, protected from downside risk, then look into annuities. There are “catch-up” annuity growth plans that guarantee (I said what I said) a 220% participation rate as long as the annuitant is age 50. Clients love this product!
Consider saying no to annuities: If you don’t fall into one of these two camps, then it is likely that an annuity isn’t the best option for you.
QUESTIONS YOU SHOULD ASK YOUR AGENT OR THE COMPANY
You should ask the following questions about equity-indexed annuities in addition to the questions in the Buyer’s Guide to Fixed Deferred Annuities.
• How long is the term?
• What is the guaranteed minimum interest rate?
• What is the participation rate? For how long is the participation rate guaranteed?
• Is there a minimum participation rate?
• Does my contract have an interest rate cap? What is it?
• Does my contract have an interest rate floor? What is it?
• Is interest rate averaging used? How does it work?
• Is interest compounded during a term?
• Is there a margin, spread, or administrative fee? Is that in addition to or instead of a participation rate?
• What indexing method is used in my contract?
• What are the surrender charges or penalties if I want to end my contract early and take out all of my money?
• Can I get a partial withdrawal without paying charges or losing interest? Does my contract have a vesting? If so, what is the rate of vesting?
For more information, join our next webinar, this coming Wednesday at 8:30 PM EST. Go register at www.Shateka.com
RETIRE BEFORE YOU EXPIRE
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