Misconceptions
Here at BestFixedAnnuityQuote.com we aim to give you honest, straight forward advice and information on annuities. Investments are like cars, few people truly have a full understanding of how they work. In fact, most people don’t know how to spell annuity. Search the internet, and you’ll see anuity, annunity, annunities, annuties, anuities, and more.

All joking aside, an annuity is an important, potentially life-long decision that can impact you, and your loved ones. Therefore, it’s important to understand all the factors that go into choosing the best annuity (or anuity, annunity, etc).

 

 

 

 

To further complicate your ability to make the right decision, many insurance advisors (like many car repair men), attempt to SELL the solution that’s best for their commissions/business, rather than ADVISING on what’s right for you. Here, we set out to explore some of the “myths” of annuities, and provide you with a stronger base of knowledge to protect yourself against the sales-minded insurance agent who says annuities are right for every situation….they’re not. Like any investment, there are positives, and there are negatives. Annuities can be a great investment for retirement, especially in this economy, where a fixed annuity can still provide an interest rate of 8% or more, far higher than other safe investments. However, you should be aware of the right circumstances for an annuity. The following are some of the lies or myths you may here about annuities – be aware.

1.Annuities Are Risk Free
This is incorrect, not all annuities are risk free. In fact, variable annuities can be just as risky as the stock market; it depends on what you choose to invest in with the freedom that a variable annuity provides. Fixed Annuities, on the other hand, are a very safe investment. They provide a fixed interest rate (tax deferred), for a set period of time, or for life. In the event that the insurance company goes bankrupt, your principal is protected up to $500,000 depending on the state you live in.

2.Annuities Are Always a Good Investment
Annuities are an intelligent investment, planning for your retirement; however, they’re not guaranteed to be the best investment for everyone. Annuities can provide you with security, assurances for your family, steady growth rates, tax deferred growth, and more. But they also usually come with withdrawal penalties if you’re younger than the age of 59 and a half. If you may need short-term access to your funds, and are younger than 60 annuities are not right for you.

Although returns on annuities are tax deferred, if you’re purchasing annuities with income you’ve made this year, and you haven’t maxed out your 401k’s, you should. 401k’s do not have income tax. Annuities do allow for unlimited contributions once you have received the benefit of your 401k’s.

3.“This Annuity Is The Best One, For Everyone”
If you hear this from an insurance agent, run. What they really mean, is that that annuity provides the biggest commission for their pocket book. Annuities do differ greatly between companies, and it is true that some offer may be better than most at that time. However, the decision to make an annuity depends on so many things. Your financial situation, liquid assets, future income, future plans/spending habits, your age, years left until retirement (or in retirement), the current market conditions, etc. You get the picture. No annuity is right for everyone, but the above considerations should be made before determining the right annuity for you.
If you’d like to speak with someone who will advise you, rather than sell you, fill in our quote form at Annuity Quote .