Mistakes to Avoid When Buying an Annuity
April 27, 2023 | Gabe Taylor
As with any impactful financial decision, there is much to consider when purchasing an annuity. You will want to make sure the product you choose is ideal for you and your financial goals. Let’s look at some of the biggest mistakes to avoid when buying an annuity.
1. Not Considering an Annuity
If you are reading this, then you clearly have an interest in how an annuity can benefit your retirement nest egg. When considering an annuity it is easy to become overwhelmed with the various types, details, and payout options. This overwhelm can quickly lead some to avoid annuities altogether. However, an annuity can be a great addition to your financial portfolio as they can provide guaranteed lifetime income, safety from market volatility, and tax advantages. A fixed annuity is a good option for those wanting something more predictable.
Learn More About Annuities
2. Not Paying Attention to Fees
A common mistake made by those considering buying an annuity is failing to examine the associated fees. Fees depend on the type of annuity, where some annuities have little to no fees and others do. These fees may include mortality and expense fees or administrative costs. There can also be withdrawal charges if you take out more than your agreed limit. In order to get the best return on your investment, it is essential to pay attention to and understand fees associated with the annuity you are selecting, as they can vary widely from product to product.
3. Paying for Features You Don’t Need
Another area to consider when buying an annuity is the features or available rider options and determining what is necessary to achieve your financial goals. In some instances, the protection or benefit a rider may provide can be beneficial; however, these added features can often cost you more than they give back. Talking with an experienced professional to determine what is best for your situation can be helpful.
Read More: Why or Why Not Have an Annuity
4. Not Fully Understanding Your Options
Navigating your way through the complexities of annuities can be confusing, given the different types, terminology, and payout options. Annuities can offer retirees a reliable source of income by providing them with regular payments throughout their retirement – typically with some guarantee. However, opting for an annuity without thoroughly researching and understanding its terms could cost you significantly in terms of financial security.
Choosing the right annuity is important as it can have a significant impact on your retirement. It’s essential to take the time to explore all available options and select an annuity that best suits your individual needs and circumstances. At Twin City Underwriters, we know that individualized attention to a client’s personal situation and needs are especially important, which is why we take the time to understand you and your financial goals. Contact us to schedule an appointment with one of our experienced insurance agents.
Are you ready to have a meaningful discussion about your financial needs? Call or email TCU today to set up a free, no-obligation appointment with one of our dedicated agents.
Call Twin City Underwriters to learn more: 651-488-0172 or 800-507-6778.
