With baby boomers retiring in record numbers, having a retirement plan in place has never been so important. The market turmoil and uncertainty of the past few years can make you unsure of what your best course of action should be when you’re retirement planning in Topeka. Annuities are a great way to protect yourself against outliving your money while protecting yourself against stock market volatility.
However, before signing up for an annuity, it’s important that you understand which one is right for you and ask yourself these important questions:
- Who’s selling the annuity? Will they be able to make good on their promises? Credit ratings matter. Consumers have little other objective information to determine the likelihood they will receive their promised benefit in the future. So it makes sense to ask for the exact rating of an insurance company.
- How much will the annuity cost annually? Annuity contracts are generally more expensive than mutual funds. The richer the guarantees carried by a contract, the higher the corresponding costs will be. In addition to these fees, variable contracts will also charge direct or indirect asset management fees.
- If you invest $100,000 today, what will the value of the contract be after 1 years if the market stays flat, increases, or falls? This question is much trickier than it may appear! Consider all fees, and in the case of equity index annuities, the formulas that might be applied to calculate total return. If you cannot answer this question about an annuity contract with absolute certainty, you should pass.