First, what are you trying to accomplish. Fixed annuities do 4 things pretty good.
- Can give conservative growth that protects your principal.
- Can provide income for life.
- Can provide limited long-term care (typically through doubling an income rider), although some fixed annuities are specifically designed to offer stronger benefits outside of the income rider doubling feature.
- Can provide limited legacy growth (if you can’t qualify health-wise for life insurance).
I wrote about these 4 points in a prior article on whether or not you should buy a fixed index annuity.
I came across an article about a lady that asked Chris Farrell, the economics editor for American Public Media’s “Marketplace Money” show, whether she should purchase a variable annuity. Her big concern was that the salesman she spoke with started becoming a little aggressive in his sales pitch.
It’s a shame that can happen (and does happen a lot). No one should be pressured into buying anything. Before making any decision you need to determine if an annuity is right for you. Don’t let one aggressive salesman lead you to think that all annuities are bad. They can serve a purpose when used properly.
Chris Farrell’s advice is spot on:
- Don’t be rushed into a decision
- Consider a lifetime annuity (if she needs the income)
- The variable annuity she is being pitched may not make sense for her since she already has her savings in tax deferred shelters like a 401(k).
Yes, there is definitely more that goes into the decision making process than these 3 points. But they are a good start.
To read the full article CLICK HERE.
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