Patience and determination are a must, but some good guidance can also help.
Here are SEVEN KEYS to understanding how to find the correct annuity and sort through all of the different options.
You Need a Licensed Professional, You Will Never Understand It All - the first thing to recognize is that you will never fully comprehend all of the annuity options available. There is a reason a license is required to offer an annuity. Find a good licensed agent or advisor that can help. After all, they get paid by the insurance carriers so use their time and energy instead of your own. Good agents have software programs developed by agencies and insurance companies that can help narrow down the best annuities that could meet your needs and goals. Trusted professionals can be easily spotted but try and work with one that is focused solely on the annuity market.
Know Ahead of Time Your Goals and Objectives - When choosing what type of annuity to buy you must consider only what it is you are looking to accomplish. Is it income now or down the road or is it protecting the money from loss and leaving it to the loved ones? Or, could it even be a combination of the both? Knowing these things will help you and your professional elminate those that don't fit your situation saving you both time on needless discussion.
Have a Basic Understanding of Annuity Types: There are three types of annuities to consider. Variable Annuities are invested directly into the market and usually have higher fees and carry a high risk of loss to principle balance though some provide income guarantees. Fixed Annuities are like high powered CDs because they simply provide a guaranteed fixed rate each year and annuitization or income options. Fixed Indexed Annuities are not invested into the indexes or equities but rather use the indexes as a growth indicator. This keeps your money protected while providing reasonable upside growth, guaranteed income options, low fees and no risk to principle balance.
Find an Annuity Specialist, Avoid Generic Sellers - Nearly every bank or financial organization has some type of annuity they can offer. However, beware of generic annuities and sellers that have limited annuity contracts. Some sellers have "production requirements"
Be Clear About You Want - Some annuities are designed to protect your principle balance, obtain respectable growth and provide income for life if desired. Each annuity illustration is customized based on your specific needs. In order to know which product is best suited for your particular needs your agent will likely spend time asking you about your personal goals, financial outlook and income needs. You can help the process by knowing your tolerance for loss, the income amount you will need and when you would like to start receiving that income stream or if you will just desire to annuitize your account after the annuity matures and do something else with your balance.
Focus on Top-Rated, Large Providers - To ensure your money is as safe as possible, make sure to research the strength and size of the company offering the annuity. Ratings can be looked up at A.M. Best website. A and some B-rated providers are the safest but you should also know their company history and the asset base being managed. Remember, it is your retirement money and you want it safe as possible.
Don't Get Trapped by Paralysis of Analysis - It can be easy to over-think the annuity purchasing process. As long as you are working with a respected, knowledgeable, trusted agent, together you should be able to quickly find an annuity that can meet your needs. Make sure the company is stable, high rated, your fees and surrender periods are understood, and that the details of your plan of action are clear and laid out properly in the contract. Keep in mind you also have a look-back period to determine if you want to keep the annuity or not as well. Nothing could be worse for you or your family in choosing to do nothing out of fear. Remember, time is the most valuable asset you have and once it is gone, you cannot get it back.
Brady Speers is a safe retirement expert that specializes in helping retirees and pre-retirees protect their life savings from stock market risk and provides guaranteed lifetime income. He is an income planning specialist and helps clients grow their money using safe money growth concepts and provides assistance to clients by offering social security maximization insights and wealth transfer solutions. He has clients in three states and holds an agent license in numerous territories with offices in the Dallas and Houston areas. He was listed in the 2013 Heritage Registry of Who’s Who and the Co-Host of "The Retirement Experts Radio Show". Learn more about him at his website: www.bradyspeers.net