I live off Social Security and I take distributions of about 4 percent a year, and that covers my bills. A friend said I should buy an annuity so I have guaranteed income. Where do I begin? You are correct most of the annuities have high fees.
They're complicated products that shouldn't be purchased without significant research and understanding based on your goals and time horizon. Sometimes clients can benefit greatly from the right annuities bought for the right reasons, he said, but you need to understand the pros and cons before buying. He said annuities are sold by insurance agents with promises to provide guaranteed income, provide good return without downside, and save on income tax, and more - but the guarantees are only as good as the insurance company.
He said annuity salespeople get paid a very good commission and insurance companies like to make profits from your money.
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This is what makes annuities expensive. More recently, non-commissioned annuities are sold by investment advisors. Investment advisors do not get commission but they may charge a fee, he said. There are several different types of annuities and they come with various riders, of course at an additional cost for each rider, he said. It provides a piece of mind that you will not outlive your savings.
Insurance agents like to tout income tax advantage of annuities but are the advantages real? Shah said there is no tax-deferred advantages If you buy annuity in qualified accounts or tax-deferred accounts such as an IRA because qualified accounts are already tax-deferred.
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I have $1 million for retirement. Should I buy an annuity? - yhafypyjih.cf
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