Protect Yourself and Your Family's Future By Avoiding Annuity Mistakes
Annuities can be a real advantage when you're designing and planning for your financial future. When you're considering investing in an annuity, there are a number of important factors to consider. One of the ways to ensure that you're making a quality decision on your annuity is to learn from the mistakes of others. Let's examine how you can avoid some of the errors that others have made when selecting and maintaining an annuity.
Since tax deferral allows your money to grow at much faster rates than in taxable investments or equity funds, tax-deferred annuities are popular, effective ways to set aside money for your retirement. While performing the necessary research and assessing your own needs is integral, too many investors forget that the annuity exists after it is created. Annuities are assets that need to be managed, so don't make a mistake like leaving your funds in a money market subaccount or neglect to find a new, more competitive annuity after the surrender charges have expired. You'll also need to be certain that the rate guarantee period matches the surrender period.
The two types of annuities are fixed-rate and variable. Fixed-rate annuities guarantee a fixed rate of return, while variable annuities are handled by asset management firms and the returns are contingent on equity market conditions. Variable rate annuities are thus, more risky. Since agents work on commission, you should ensure that the surrender charge period and annual fees aren't designed to take money out of your pocket and put it in your agent's.
Keep in mind that annuities may not be as effective for your long-term plans as an IRA, 401[k] or 403b. You'll be penalized severely if you take your money out of an annuity early, so another avenue may be better for you if you're simply investing for a college education. Annuities are long-term savings vehicles, so don't risk losing some of your hard-earned money due to early withdrawal if you think that may be a possibility. Also, don't select an annuity based on hard-to-achieve bonuses or "trust me" considerations.
The bottom line is to do your own research and trust in your own determinations about your current financial needs as well as your future requirements. Then and only then will you be able to confidently and capably manage your long-term financial security.
You can perform all the research you'll need to make an informed decision at DirectAnnuities.com. We offer a host of financial planning products and will work with you to get the best fixed annuity rates anywhere. The hands-on approach of our knowledgeable, driven staff will help keep you focused on where you want to go. Browse our site to learn more or contact us at 1-866-DA DOT COM (323-6826) if you require additional assistance.
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