Are Annuities for You?
by Mary Prokopiuk
(St. Paul MN)
Annuities can be a good thing for people who want a guaranteed payment over a long period of time. They are especially appealing to people at or approaching retirement. But ask a few questions before you make the decision. You'll be tying up a large sum of money for a long period of time. Are you sure you won't need all or part of that sum in the near future?
You should also research the financial health of the company selling the annuity. Your local public library can help you with that. And what are annual fees charged by the insurance company to administer your annuity?
You might want to compare fees between different companies offering similar products before making your decision. Annuities can appear complicated at first glance so take the time to research the differences between the various types, how they invest your money and how they pay it out.
Do your research from a source other than the advisor selling you your annuity so you have a basis to compare the information. Annuities are no different from any other investment in that you should thoroughly think through your goals and carefully weigh the benefits against the risks and costs.