Top 10 Questions to Ask
5. Do I want my retirement savings to continue to grow?
Many retirees are able keep a portion of their assets invested in equity-based products, where the highest returns have traditionally been, rather than in more conservative investments, such as CDs and bonds.
Index annuities provide a middle ground between those two choices, allowing assets to grow tax-deferred, with protection against downside market risk. Many also offer the option of guaranteed lifetime income payments at some point in the future.
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6. How can an annuity help meet my retirement needs?
An immediate annuity is the only personal retirement product that provides guaranteed income that cannot be outlived. Index annuities give the advantage of tax-deferred investment growth, while providing protection against downside market risk with a variety of options to access your money. Optional annuity death benefits offer additional protection of your assets.
7. Does the annuity carry a surrender fee?
There may be charges to withdraw some or all of the funds in your annuity. While most annuity contracts allow limited access to your account values, most have surrender charges for many years.
8. What if I need to access to the money in my annuity?
Many deferred annuities allow the withdrawal of a portion (e.g., 10-15 percent) of the initial investment each year without surrender charges. Some annuities also provide full access to your money, free of surrender charges, in the event of serious illness.
Before you sign the contract, be sure to understand and feel comfortable with how your annuity will work should you need to withdraw money.
9. What should I know about annuity fees and the companies offering annuities?
While fee structures vary, fixed annuities have no upfront sales or annual maintenance charges. Before purchasing an annuity, be sure to evaluate the insurance company's financial strength, ratings and reputation. Lesser-rated companies may have more attractive rates, but this is often a poor trade-off for selecting a company with a proven track record.
10. Does my annuity specialist understand my retirement goals?
Work with someone who is knowledgeable about retirement-related issues and current annuity features and benefits. Prepare a list of your goals before you speak with your agent to select the best annuity to meet your retirement goals.