5 Keys to a Better Annuity

Written by Hersh Stern Updated Sunday, September 10, 2017

You’ve been doing your retirement-planning homework and have discovered that an annuity may be a good fit for your needs.

So you're thinking more seriously about buying an annuity. But you're also concerned that you may not know what to be looking for to make the right choice.

Especially when, if you're like most of my clients, buying an annuity will be one of the biggest financial transactions you'll ever make, with lifetime implications for your income and financial security.

There is every good reason to tread carefully before taking the step to buy.

Calculate My FREE Annuity Quote Now!



  • Optional: For a 2-person annuity (joint lives)

No agent will call you

Your privacy is guaranteed.
Find advanced calculator options here.

So what 5 key tips should you keep in mind when moving forward? Here's what I've learned from thirty years of advising clients on how to shop for their annuities:

1. Take your time

You are making an important financial decision, so don’t be in a rush. If a salesman pressures you to hurry, it’s a good signal to take a step back and reassess. Never react to this kind of pressure, and take as much time as you need to feel you’ve made a balanced, well-reasoned choice.

2. Remember, if it sounds too good to be true…

By this point in your life you know the value of this old adage. When people get scammed, it’s usually because greed trumped common sense.

If an annuity offer you're reviewing sounds too good to be true, it probably is. Watch out for payouts and terms way more generous than anything else you’ve found.

If you can’t understand how the insurer can make money on the product as it is described to you, it’s an indication that you should have your guard up. At the very least, more research is required.

3. Use the internet wisely

On the one hand, the internet makes it so much easier for you to find information about annuities than used to be true in the 80s and 90s; on the other, with every new internet annuity site there seems to be more and more unreliable and just plain mis-information out there. Be sure you know the pedigree of the site before you start to believe what you read.

Check out the audited customer reviews of a site, and don’t hesitate to speak with the site’s customer representatives if you have questions. If you are consulting media reports about annuities, remember that boring doesn’t sell, and so often I find writers giving extreme opinions and hype just to get people's attention. I'd say you can use this type of information to craft your questions to ask an agent, but don’t simply rely on it to be "the truth".

4. Be completely sure you understand what you’re buying

Annuities continue to evolve, and many companies are offering products and features that are extremely complex. It’s very important that you understand your annuity.

Not only will this give you greater peace of mind, it might also save you from an unexpected unpleasant surprise some day. Never hesitate to ask as many questions as you need to have answered.

Testimonial Image
I was hesitant at first to buy an annuity on the internet. Once I got your quote report and read your reviews I was happy I found your website. Your phone reps were always very helpful. You made the whole thing go really simple. Thank you guys!
Joe Murphy
Read 200+ verified reviews

If you are working with an honest and caring agent, he or she will be pleased to help. Finally, give the annuity you’ve selected the common sense test. If something doesn't feel right, trust your instinct and learn more.

5. Consult with an annuity specialist

When annuity shopping, people often wonder if they should do it themselves or speak with a specialist. The advantage of speaking with an annuity specialist is that he or she will have years of experience and usually will be representing multiple companies, helping you to compare diverse options.

The right specialist can show you how annuities from different insurers compare and isn’t restricted to offering you products from just one company. More options help increase your confidence that you’re making the right choice.

However, if he or she starts to pressure you or you’re not satisfied with the answers, move on. There are plenty of professionals who understand the value of helping you make the best choice – even if that sometimes means no choice at all.

We'd love to hear from you!

Please post your comment or question. It's completely safe – we never publish your email address.

Add a new comment:(Allowed tags: <b><i><br>)


Comments (3)

  1. Jim:
    Sep 18, 2014 at 07:14 PM

    Seems to be a a good company. Stay away from jdannuity or seniorannuityalert. It's a SCAM!

  2. richard:
    May 27, 2015 at 09:41 AM

    Ariel handled my mothers annuity purchases. Very straight forward, helpful, and informative. If I choose to purchase some annuities I will look to Hersh Stern and co.

  3. Don:
    May 26, 2016 at 03:38 PM

    Consult with an annuity specialist is not the same as determining your taxes, RMDS, Social Security taxation. How all your funds interact to meet your goals. We thought we needed to generate 60k lifetime income and started with the easiest to understand. The SPIA, turned out this actually provided the least income and the most taxes. We found that no "annuity specialist" actual help create the "plan", our current plan of FIA and CD type annuities. Annuity specialist were all good at plugging products into the plan, somewhat.. Athene products seem to now king of the hill, but only 1 "specialists" 6 knew about them. Also when you run the numbers you will find that for all the bonus/rollup/ etc etc, that the best products are not much better then just putting your money into a CD type annuity. We had to figure out our self and with our CPA that 60k was over insured for us and 40k LifeTime income would be just fine, unless we live past 115 years old.
    No annuity specialist told us we could give less of our money to the insurance company. Tax laws on FIAs are straight forward, if you can find someone who will sign their name to your taxes. If your plan gets the RMDs wrong, you bought yourself a lifetime of worry.
    Also shop around its true they all have access to the same information(you did not know that), but some are better then others at finding the best for you.