Annuities are financial products that generally provide a regular stream of income. Some annuities pay a fixed amount of interest. Others are attached to a “market index”, such as the S & P 500. You want to make sure that you understand the costs associated with the annuity contract and any period your funds will be restricted (called a surrender period). Be sure to review the investment options within the contract. Also important is to consider the way you access the funds – how do I get my money out? Can I get it out in a lump sum if I want to? Or do I have to access the funds in a series of payments over a period of years. Give us a call and let us help you determine if an annuity would benefit you.
Authored by: Jeffrey O. Brown, CPA, CFP and LPL Registered Principal