Annuities are complex but useful financial tools. Be aware of the latest annuity trends when you are buying and make sure you stay aware so your annuity continues to benefit you in the best way possible. The following checklist shows important reminders for you to track annuities:
Recognize that the annuity world changes. For example, deferred annuities used to be purchased mainly as a tax dodge by people in the upper tax brackets. In the future, income annuities will likely be purchased by Baby Boomers who want a guaranteed lifelong paycheck. Keep on top of the trends, and you'll be able to make adjustments to ensure that your annuity stays on top of them, too.
Understand how "survivorship credits" (mortality credits) work. When the owner of a life annuity dies, his or her assets are distributed as so-called survivorship credits to the owners who go on living. That's the biggest benefit (and for some, the biggest drawback) of life annuities.
Get creative with your annuities. You may be able to maximize your income in retirement with a combination of two or three annuities. This path takes research and planning, but it can pay off!
Decide how much money to keep outside an annuity. When you buy an annuity, leave some money in more liquid investments so you can meet emergency expenses. If a salesman urges you to put all your money into an annuity, get a second opinion.
Plan for trade-offs in risk and reward. Annuities are insured investments, which means they protect you from some of the risks that always accompany investing. But insurance costs money, and the fees can eat up a good chunk of your returns.
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Source:http://www.dummies.com/how-to/content/how-to-be-annuitiessavvy.html
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