Annuities…a single word that by itself cannot be used as a single brush stroke to identify several different types of annuities. When opinions are formed without understanding the minor to major differences, this creates a poor view of their usefulness. Having studied annuities for almost 20 years, we know those minor to major differences and can identify the appropriate time to use them. One thing has been a constant for us; our clients have ALL been completely satisfied with our recommendations because we carefully consider the many factors involved in choosing any annuity.
Newer products allow a solution for planning ahead and can create an extremely strong income…even better than growing the funds and then purchasing an immediate annuity. These have what is called an “income value” that will grow much faster than the “account value” for the purpose of the lifetime income calculations. This also allows more control and flexibility. The insurance company calls this a rider and the rider has an annual fee. These also offer both single or joint life payouts and guarantee you cannot outlive the income stream. Flexible features allow you to turn the income stream on and off at any time you desire, as well as move the full account value after the surrender charges have ended (typically 7-10 years in length). They may also include a Nursing Home Waiver to often double your lifetime income payment or access the funds without any penalties.
These options may not be suitable for all situations, but we have certainly seen them provide excellent solutions for many of our clients. We always shop our carriers to determine which product will suit your need best as they are not a “one size fits all” solution.