What should I take into consideration when shopping for annuities?

  • Commissions. Check the broker commissions – even though the insurer is the one who gives you the annuity, the broker may make anywhere from 3 to 8% which can substantially cut into your money.
  • The Company. Make sure that the company that you are buying the annuity from has a good track record. There is no agency (such as the SEC) that checks the procedures of these companies, so the reputation of the company is of the utmost importance.
  • Compare and Contrast. Check the amount of payments that you will receive from different companies. This may vary greatly from company to company – however, do not judge solely based on these numbers. Keep in mind the legitimacy of the company.

Posted in: Developing a Financial Plan