Hi Jan,
One of the most common questions I hear about annuities is also one of the hardest to answer honestly: is this thing expensive? The instinct is to look for a fee, the way you would with a mutual fund or ETF, but annuities rarely work that way. In this week's article, we look at why annuity costs are so often built into the contract itself, hidden in caps, participation rates, and payout terms rather than showing up as a single line item. We also walk through what actually determines whether an annuity is worth its cost: not the sticker price, but whether the protection it provides solves a real problem in your retirement plan.
| | | | The Wrong Way to Decide Whether an Annuity Is Expensive One of the hardest problems in retirement is not knowing how long your money needs to last, and that uncertainty shapes almost every decision about how much you can safely spend. If you knew with certainty that retirement would last exactly 20 years, the planning would be considerably easier because you could establish a spending horizon, invest around it, and gradually use your assets with a reasonable understanding of how much is needed to remain at each point along the way. Since your retirement timeline is unknown, a portfolio often has to be managed for a lifespan that may or may not materialize.
By Retirement Researcher | | | | How Much of Your Retirement Income Should Be Guaranteed? A central component of retirement income planning is estimating how much you can spend without running out of money. Equally important, however, is deciding where that income should come from.
By McLean Asset Management
| | | | Why Annuities Aren’t Really Investments
Wade and Alex answer more listener questions, tackling everything from blending Roth and IRA withdrawals to using an inherited IRA to cover a tax bill. They close with a candid discussion of how to shop for an annuity without getting steered toward the wrong one.
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