Annuities, some people hate them, some people love them. The fact is that if you are currently reading this, it is either because you are already in the process of purchasing one, you already own one, or you are thinking about buying one.
Purchasing an annuity might be the right decision or the wrong one, and there are several factors that need to be considered in order to be certain.
First and foremost, you need to be clear about your objective. Why are you considering purchasing an annuity? And more importantly, how does this annuity serve to strengthen your existing retirement income plan?
Secondly, it's critical that you clearly understand the differences between the three major types of annuities that you are more than likely evaluating. Some annuities are more like CD's; Some expose you to market risk and do not protect your principal; Others provide protection of principal and market linked growth.
To get a concise overview of the three main types of annuities and the pros and cons of each, download our free eBook on the right.
Unfortunately, all of the elaborate crediting strategies, proprietary indexes, bonuses and other information that fill the pages of the fancy marketing brochures that you may have received mean next to nothing and only serve to complicate the whole decision making process and makes making the right decision more complicated .
In most cases, what people are looking for when purchasing an annuity is safety combined with income/growth. The truth is that annuities are either designed to provide you with maximum growth potential or guaranteed lifetime income.
So if you are thinking of purchasing an annuity because you want the maximum protected growth potential, you probably shouldn't purchase an annuity with an income rider that will seriously put a cap on your actual cash value growth.
Manny people consider the Internal Rate of Return to be the gold standard in finance. One way to objectively evaluate whether or not an annuity is right for you or not is to Stress Test it and calculate it's IRR under various stress situations.
Our Annuity Stress Test will clearly show you: