Are annuities good for retirement income?

Question

Right now, I have been offered an annuity as part of a retirement income plan. Right now, the contract includes guarantees, fees, surrender charges, and beneficiary provisions that are difficult to compare with a regular investment account. The sales explanations I have heard are not consistent, and I need to distinguish what is guaranteed in the contract from what is only projected.

Soradin · Accepted Answer

They can provide guaranteed income, but liquidity, inflation, costs, insurer strength, and other income sources matter. When evaluating the policy, an annuity is a contract with an insurance company that can accumulate value or provide income. When evaluating the policy, features, guarantees, surrender charges, market exposure, fees, tax deferral, and income options vary widely by type. The analysis should begin with the written policy and an up to date illustration, and ask a licensed insurance professional to clarify in writing any guarantee, exclusion, rider, or surrender rule that could affect the decision.

Are annuities good for retirement income?

Soradin

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