| There are seniors that take great pride in the diligent | | | | One investment option that can be an income |
| manner they saved money for retirement, and | | | | stabilizing tool and an alternative to low paying bank |
| deservedly so. They speak with great pride about | | | | CDs is the fixed indexed annuities. Unfortunately |
| the monthly percentage of their income they set | | | | these are often dismissed out of hand or unfairly |
| aside for retirement. | | | | maligned by so called financial advisors with |
| And I am not about to diminish that discipline because | | | | alternative product motivations. |
| without systematic saving during productive work | | | | Like any investment, all aspects of an annuity must |
| years, there would be nothing further to discuss at | | | | be carefully considered including costs, penalties, risks |
| the point of retirement. | | | | and upside potential to determine if they are suitable |
| However, too often stories suggest that many | | | | for your situation. But fundamentally fixed annuities |
| seniors nearing or actively in retirement forget to | | | | provide safety and dependable income especially for |
| properly plan for a crucial dimension of the retirement | | | | seniors that abhor the risks and uncertainties of the |
| equation. That dimension is adhering to a plan for | | | | market. They offer tax-deferred growth and no |
| spending the retirement dollars. Without spending | | | | down side risk to principal. |
| discipline, what you have saved will not last | | | | Fixed annuities are often presented with broad |
| throughout your life time. | | | | generalizations as to why they are not a good |
| The first issue is being clear about how much you will | | | | consideration. If you have a financial advisor that |
| need in retirement and more than half do not have a | | | | dismisses them without taking the time to review |
| clear idea. Furthermore, it is estimated that more | | | | them with you, the problem may be with the |
| than half of retired seniors admit to being off track | | | | advisor, not with the annuity itself. |
| regarding their monthly spending habits, some | | | | Here are some of the key questions to ask your |
| spending too much while other are below | | | | financial advisor...o What types of annuities are |
| expectations. Of course at any given moment in | | | | available? When are they advantageous?o If I have |
| time, there are a variety of factors that could cause | | | | to change the rules governing the annuity agreement, |
| a divergence. Some variability must be factored in as | | | | what, if any are the penalties?o What are the fees |
| well. | | | | charged? How are they paid?o How do the fees |
| Whatever you estimated your needs to be, when | | | | compare to other investments weighing safety, |
| you finally are actually walking through the retirement | | | | principal risk and other factors?o When the basics of |
| door, you must take the time, and most likely with a | | | | an annuity are explained, do you understand how |
| good financial advisor to evaluate your assets and | | | | they work?o Do I have access to my annuity |
| income to determine what level of spending your | | | | contract money? What are the conditions, if any to |
| income will support without eroding your resources | | | | access?o What happens to the annuity when I die? |
| too fast. | | | | Does the income continue to my beneficiary?o Why |
| As simple as this step sounds, surveys suggest that | | | | are annuities good for seniors in retirement? When |
| less than 25 out of 100 retirees met with any | | | | are they not a good investment for a retired |
| financial advisor during the first two years of | | | | senior?o How safe are annuities? What happens if |
| retirement. If your spending is more than your assets | | | | the insurance company fails?o How are agents that |
| and income can support, then perhaps a side job of | | | | sell annuities paid?o Are annuities best used for |
| some type will be needed as a supplement. | | | | retirement income or wealth transfer? |
| The reason these important financial issues are not | | | | Many seniors enjoy the security and safe income of |
| cut in stone and must be frequently recalculated is | | | | annuities. To dismiss their value out of hand as some |
| because there are numerous variables that can | | | | would advocate is senseless. Do your homework. |
| change your overall financial picture e.g. investment | | | | Ask detailed questions and then decide if annuities |
| performance, life expectancy, personal or family | | | | are right for you. |
| health, and evolving wants and needs. | | | | |