Many kinds of annuities qualify for annuity purchase program, even those with no surrender clauses or surrender fees. The greatest fear most Seniors face during retirement is outliving their nest egg. Yet when given the choice of exchanging a lump sum of money for a guaranteed lifetime income stream – the act of annuitization – most opt to keep the less secure lump sum. In fact, insurance industry statistics show that only about 5% of annuity owners elect to annuitize.
This paradox is called the “annuity puzzle” and contradicts an ever-growing number of economists and financial advisors who agree that guaranteed income for life provides far better retirement security than cash in hand. Understandably, the $100,000 squirreled away at the bank seems like more money than the $680 a month for life a 65-year-old male would receive by annuitizing the same amount.
Selling your annuities may be appropriate if you are considering ways to transfer wealth to children and grandchildren, you have experienced a change in your life which requires a lump sum of cash and or your attitudes about saving and investments have changed since you purchased your annuities.
