Is an Annuity Right for Me?


 is annuity good for me

If you have come to our site, chances are that you have been reading or hearing a lot of things about annuities. Since annuities are complex, they may have been simplified too much by some financial advisers which incurred horror stories ending in lawsuits. However, it is not because some investors got fooled by their advisers that annuities are evil.


In fact, the right question should not be “is an annuity right for me?” but “which kind of annuity match my needs?”. Annuities can be customized according to your personal financial situation. You can also combine more than one product to make sure that everything is covered.


Should I buy an Annuity?


If you go through the different types of annuities, you will learn more about each of them. You can also speak with a representative for free and inquire more information. But for now, let’s keep it simple and try to draw the picture of an investor with an annuity. Here’s a few hint to know if you are the kind of investor who could benefit from an annuity:


#1 You are concerned about your retirement plan. You see retirement coming in a few years and you want to make sure you will have enough money once you stop working. Being financially secured is one of your priorities.


#2 You are familiar with investments. You have been saving money for retirement and you have built your nest egg throughout your working years. You invested in either bonds, CDs, mutual funds or even managed your own stock portfolio. However, you feel uncomfortable with the market volatility and you wish to secure a part of your income at retirement.


#3 You are seeking for a stable stream of income. The bulk of your retirement plan is based on amount withdrawn from your investments. Instead, you wish you could have some kind of guarantee you will be receiving money.


#4 You are concerned about longevity. You are well aware that healthy people live longer today. Therefore, chances are you will still require money at the age of 85 and you do not wish to count on Government pensions to support your lifestyle and needs.


#5 You tend to be risk-averse toward your retiring years. As an investor, you might have been more aggressive with your asset allocation in the past but you do not wish to risk it all anymore. You are seeking for a more stable way to invest your money in order to avoid economic crashes.


#6 You have a high tax bracket. Since annuities are less taxed than other type of investments, high tax bracket investors tend to benefit more from this product.


#7 You are pessimistic. If you don’t believe the stock market will generate high returns in the future and if you are more a “bear” than a “bull”, annuities can avoid you to invest in equity. You should like the security coming with this kind of contract.


#8 You are a Women! Since women have a better life expectancy than men, their need for an annuity is bigger. The investment return should be better for the women than for the men.


You Don’t Need All 8 Points to Buy an Annuity


The above mentioned points are just guidelines to tell you if you are likely to benefit from an annuity or not. Technically, if you share one of those point alone, there is a high chance that a part of your nest egg should be use to purchase an annuity.


If you are still unsure if you should purchase an annuity, you can speak with an advisor for free now.