Annuities are financial investment products that are typically designed to pay out income, though they can also offer savings with the benefit of tax-deferred growth.
Unfortunately, there is a lot of conflicting information out there about annuities and it is very important to know what to look for before purchasing one.
What is an Annuity Gator?
Annuities are long-term financial contracts where you put some of your savings in and an insurance company promises to provide you with a stream of income that can last for life. They allow your assets to grow tax deferred, which can help you save more and get a better return on investment over time.
But you need to be careful with annuities. They can be complex, confusing and often misunderstood.
Despite all the industry jargon, annuities have important features, benefits and limitations that you must know before you sign on the dotted line. And you need to understand the terms like riders, surrender charges and term options — all of which can add up quickly in fees and costs.
If you’re considering an annuity, it’s worth taking the time to review all of these things with your adviser. That way you can make an informed decision that will meet your retirement goals.
How Does the Annuity Gator Work?
Insurance companies offer annuities to help meet a range of financial goals, including principal protection, lifetime income, legacy planning and long-term care costs. These annuities come in three basic forms — immediate, deferred and fixed.
In a fixed annuity, your money earns interest based on a specific rate set in your contract. There are also equity index annuities, which track a market index like the S&P 500.
A type of annuity that is popular with retirees, equity index annuities typically provide a higher return when the stock market rises. However, there are also risks that can reduce your returns.
In addition, annuity riders, such as income or living benefits, can cost extra fees and often have strict requirements. For example, many living benefit riders require a waiting period before you can withdraw guaranteed living benefits, which are typically the most valuable part of your annuity.
Does the Annuity Gator Help You?
The annuity gator is a tool that you can use to learn more about how to choose the right annuity for your needs. It is designed to make the process of choosing an annuity a little more straightforward.
There are many different types of annuities out there, and they can be quite confusing. Plus, you can run into fees that could eat away at your overall return.
For example, if you have an annuity that allows you to withdraw funds from the contract, you can also incur a surrender charge. This is a fee that can range from three to four percent each year.
Luckily, the annuity gator can help you avoid these charges and keep your money safe. The annuity gator also offers other features, such as terminal illness and extended care waivers. This can give you peace of mind that your money will be safe, even in the event of an unfavorable market situation.
Is the Annuity Gator Right for You?
Annuities are a great way to help ensure you will always have a reliable income source in retirement. However, all annuities are not created equal – and there may be some tradeoffs you’ll have to make in order to achieve your specific goals and needs.
In a lot of cases, these financial vehicles can contain a lot of “moving parts” and fine print that can lead to confusion for both consumers and financial professionals.
One example of this is the Jackson National RateProtector MYGA annuity – which can offer a guaranteed fixed income that you can count on for life, but there are also some tradeoffs that you’ll have to make in order to gain these benefits.
For this reason, it’s critical to read the “small print” if you want to avoid making costly mistakes and compromising your long-term financial security. This is why it’s important to consult with a licensed professional if you have any questions about annuities or annuity alternatives that could help you achieve your goals and needs a bit better.
