Not a finance guy so I don't know all the things to watch out for. It does seem like some don't like the word annuity.
7.5% annual draw seems good. Rule of thumb is 4% to maintain the balance in the account but that works in a good market which we don't have today.
- Your advisor will make money selling this to you but there's nothing wrong with that
- If you took 4%, about half as much, and if the market works well for you then when you pass then there will still be funds to pass to your heirs.
- If the market does not get better then that 4% becomes less and less every year
- If you take the annuity and pass in less than 13 years then you leave money on the table that your heirs will not receive
- If you take the annuity and live to 84 (not unlikely) then you will have made money regardless of the market (assuming the payout is not tied to the market)
- If the company goes under then you definitely lose
I have a similar decision to make in the near future and would really like to hear *why* an annuity is such a bad idea.
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Why do people insist on making claims without looking them up first, do they really think no one will check? Proof by emphatic assertion rarely works.
Confirmation bias is real; I can find any number of articles that say so.
Victor, NY - Randallstown, MD - Yakima, WA - Stevensville, MD - Village of Hillsborough
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