Annuities

[Deleted User]

I am wondering if anyone here has ever looked into or has an annuity ? I hear the commercials for them on local radio stations and have read about them somewhat. Thoughts ????

Erik Tracy

From what little I have read, am doing more and more as part of my retirement planning - they might be a good for some if they are very adverse to market risk and you have enough 'corpus' (the big lump sum needed to by one) to 'surrender' for the guaranteed payout and you don't need a whole lot.

The down side is they are not considered good for the long term against inflation protection - so if you buy an annuity now and inflation takes off, your buying power has been eroded.

You could buy inflation protection or variable annuity but that costs more.

From the 'early-retirement.org' website, not many folks are into annuities - as they can do better on their own and not surrender the principal.

ymmv

tonyb

Different annuities for different situations but in general, they take your coin and invest it.....give you x-amount when you retire monthly out of that investment. The kicker is and this is where you have to be careful, is should you die....lets say 4 years after retiring, the balance of coin in that account goes away with you. It's not there to leave to anyone, poof....gone.

Are they all like that ? No...but the majority are. Different retirement vehicles out there to suit anyone, but also different crooks looking to scheme those life long retirement accounts that have some huge balances. Another thing to consider with retirement accounts is estate taxes when you die. A basic retirement account will be considered part of your estate and subject to up to 50% in taxes alone....depending on your state. There's ways around this but you need a good tax planner/CPA/accountant to go over those options. Same goes for any other assets such as real estate, cars, boats, furniture, bank accounts, etc....all subject to inheritance taxes.

Talk to a professional tax planner, these infomercials on retirement planning are very misleading.