Comments on: When You Should Buy an Annuity: 5 Real Life Scenarios

By: Dale

Dale — Mon, 31 Jan 2022 19:29:34 +0000

Hi Jeff
Was getting ready to jump into a variable annunity but am just not sure
Fees scare me and when I asked my insurance agent about her commission she said she doesn’t really know what it is because she gets combined sums from her accounts (sales) uh huh
Made be suspicious and as I am not well versed in investing (my 401k was thru work}
Healthy gym going guy 66 with longevity in my family soto make a good move want
What do you suggest?
E-mail me if that’s possible
Dale

By: Don Gotshalk

Don Gotshalk — Sat, 20 Jul 2019 17:09:28 +0000

I have an IRA of about $400K. I am a healthy 83 years old married to a 77 year old women. I understand that if I pass on that money will pass on to my healthy wife . Will it have to be declared as regular income with in one year of my passing and be taxed at the highest rate of about 40%?

I understand there is a $130000 annuity that could be purchased with in the IRA that would not be taxed immediately. What are the benefits sales commissions and costs of such a policy when purchased at age 83.

By: charles

charles — Tue, 14 May 2019 12:58:12 +0000

your article contains several errors. the biggest, the insurance company keeps the difference. not true. the insurer buys options on the s&p with the interest generated from bonds. unfortunately rates are low so they cannot buy as many options as in the past. Generally the interest credited will be a little more than C.D.’s. I have a 9 year old annuity in which has averaged 6%. I had two others that averaged 4.5% because I got fancy and selected some weird global indexes. Your article, like almost everyone’s concerning annuities, addresses the downside of annuitizing. Almost no one annuitizes any more. Annuities have Income Accounts where the owner can take monthly payments as if he annuitized but if he dies too soon the remaining amount is paid to beneficiary. That supposed negative has been addressed. I think if you are not in the financial planning business or own annuities you cannot understand how they work. It is entirely different to write about something compared to doing the something.

By: Jeff Rose

Jeff Rose — Tue, 11 Sep 2018 16:56:43 +0000

In reply to Vicente Alcaraz. Hi Vincente - I'd start by sitting down with an accountant and figuring out the tax liability involved in selling those properties. That will reduce the proceeds. You might also compare the rent income you're getting on those properties to the income you'll get from the annuity. And of course, real estate has the advantage that it tends to keep up with inflation (rents rise over time). You really have a lot of number crunching to do, there's no easy answer, certainly not one I or anyone else can give you online.

By: Vicente Alcaraz

Vicente Alcaraz — Fri, 31 Aug 2018 14:14:53 +0000

I am thinking about selling rental properties totaling approx. $600,000 and start an annuity to use as income until retirement age or 67 when I would be able to tap into my 401K, I am 54 and make approx. $110K per year and have approx. $650K in 401K between my wife and me.

What are my options?

By: Jeff Rose

Jeff Rose — Wed, 18 Apr 2018 22:58:48 +0000

In reply to Stewart. Hi Stewart - The best way is to sit down with an agent and have him or her run scenarios for you. There are different types of annuities with different provisions. One thing to watch out for is the possibility the insurance company will retain the funds if your money outlives you. It's a common annuity provision, so you'll have to look for an annuity (or annuity rider) that prevents that from happening. And you'll have to be very clear in stating that objective.

By: Stewart

Stewart — Tue, 17 Apr 2018 18:41:55 +0000

Thanks for some great info on annuities. I’m a recently retired finance professional so reasonably confident in investing my nest egg. My biggest concern is outliving my savings. I’m thinking a deferred annuity might be a good product for me as an insurance policy. I presume that the longer you defer the income the bigger the eventual payout. Is there a place I can easily get some numbers on that: e.g. make an investment of $100K today at age 60, what would my monthly (?) payment be if I deferred all income to age 90?

By: Jeff Rose

Jeff Rose — Sat, 03 Mar 2018 16:26:18 +0000

In reply to Considering. You should looking into an annuity with a guaranteed income for life. It will continue to pay you even if the principal in the contract has been exhausted. And once you die, the insurance company will return any unused funds.

By: Considering

Considering — Sat, 17 Feb 2018 12:21:39 +0000

I am a single older worker and realise that being single and older I am not part of mainstream society. I have no children or any other relatives that I care to leave money to. I do worry about my older age, inflation, increased costs, plus the fact that I will need to retire due to age and health. I am considering purchasing an annuity to provide me with income for life until death, beginning at about age 70 or so. I do not care if I have any money to leave after I die as I only worry about myself while I am alive. Society’s values today are not my own so leaving anything to a society that I see as alien to me is not a consideration. Nobody looks after single women so we must look after ourselves. An annuity can provide to the end so may be a friend to single older people. If I had children I would want to leave something to them but since I do not, there is not that obligation. I do not care if the money is worth nothing when I die because I only worry about the next 25 to 30 years. Today there is not the respect for older people that there used to be so I do not care about future generations.

By: Jeremy Thompson

Jeremy Thompson — Thu, 02 Nov 2017 02:08:21 +0000

Thanks for some nice do’s and don’ts on annuity! I had no idea about this until recently when my son suggested it to me. I’m glad that you mentioned about how I can use an annuity as an alternative to life insurance since I have a few cases of health-related conditions already. Additionally, may it be not as much as a death insurance, we can still get death benefits from it. I’ll try looking for this annuity and have one made. That should ease my worry of my passing bringing issues to my heirs. I wouldn’t want to be the cause of what will tear my family apart.