Are Annuities Ever a Good Idea?

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Dependence on Individual Goals and Risk Tolerance Annuities can be a good idea, especially for those seeking stability and predictability in their retirement income. Their suitability largely depends on individual financial goals and risk tolerance.

Rule of Thumb: Avoiding Losses A key consideration is the ability to handle financial losses. If losing money is a significant concern, annuities may offer a safer alternative to more volatile investment options.

Advantages of Fixed-Indexed Annuities (FIAs)

  • High Returns in Certain Years: Some clients have experienced over 20% returns in a given year with FIAs, locking in gains immune to market volatility or fees.
  • Stability Post-Retirement: FIAs are particularly beneficial for those nearing or in retirement, seeking safe investment options.

Benefits of Long-Term Care Annuities

  • Cost Reduction: a long-term care annuity can significantly lower the expenses associated with long-term care, potentially reducing costs by up to two-thirds compared to self-funding.
Is An Annuity A Good Idea

Annuities with Enhanced Death Benefits

Annuities vs Other Retirement Options

FeatureFixed-Indexed AnnuitiesLong-Term Care AnnuitiesOther Investment Options
Return StabilityHigh (up to 20% in some years)N/AVariable
Risk of LossLowLowHigh
Suitability for RetirementExcellentExcellentDepends on Risk Tolerance
Long-Term Care BenefitsNoneSignificant Cost ReductionNone
Death BenefitsEnhanced OptionsN/ALimited or None
Tax BenefitsPossiblePossibleVariable

Conclusion

Annuities can be an excellent choice for individuals seeking a stable and predictable retirement income, especially when the tolerance for financial loss is low. Their suitability varies based on personal goals, with specific products like FIAs and long-term care annuities offering unique advantages. While annuities provide stability and special benefits like enhanced death benefits and tax offsets, selecting the right product to match individual needs is crucial. Contact us today for a free quote.

Request A Quote

Get help or a quote from a licensed financial professional. This service is free of charge.

Contact Us
First
Last

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

Scroll to Top