Understanding the Value Over SPIA
- Control Over Your Money: With a deferred annuity, you retain control over your funds. This means you can access your money if needed, unlike a SPIA where you typically lose access to the principal once payments start.
- interest Earnings: Deferred annuities allow your money to grow through interest accumulation. This growth can offset the impact of fees and potentially increase your overall benefits.
- Lump Sum Death Benefit: In the event of your death, a deferred annuity often provides a lump sum death benefit to your beneficiaries, which is not usually available with SPIAs.
Prioritizing Income Over Saving on Fees
- If your primary goal is to maximize income, focusing solely on fees might not be beneficial. Despite higher fees, a deferred annuity with a guaranteed income rider often provides higher payments compared to a SPIA.
In summary, while it’s important to consider fees, they should not be the sole deciding factor. The additional benefits and features of a deferred annuity with a guaranteed income rider can provide more value in the long run. If income is your primary concern, prioritizing the payment amount over fee savings is a reasonable approach.
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