16 Things You Need to Know Now About Annuities
An annuity can provide lifetime income, but there's more to how an annuity works than meets the eye.
I was glad to contribute to this article, "16 Things You Need to Know About Annuities" on usnews.com by Coryanne Hicks and Philip Moeller published on May 03, 2021.
It allowed me to factually frame the misunderstood world of annuities. This article was originally published a few years ago, but the authors contacted me to provide updated answers to the same 16 questions below:
- What is an annuity?
- Why buy an annuity?
- How does an annuity work?
- What is the difference between annuities and life insurance?
- What are the different types of annuities?
- How do fixed annuities work?
- Annuities may have early withdrawal penalties.
- A variable annuity has investment risk.
- How are annuities taxed?
- Annuity fees vary, but they all have commissions.
- Indexed annuities are not the best of both worlds.
- How does a contract rider provide additional benefits?
- What happens to your premiums if you die?
- Guarantees are only as secure as the insurance company making them.
- How to reduce risk? Annuitize gradually.
- Not everyone needs an annuity.
“…annuities are among the most commonly misunderstood and misused financial products. "If you say the word 'annuity,' what do you mean? There's so many different types," says Stan Haithcock, also known as Stan The Annuity Man. "Saying you hate annuities is like saying you hate all restaurants."
This is a great piece for people that really need to know the basics about annuities, and a good refresher for those of you that have a good foundation of knowledge of the annuity category. Enjoy the read!