3 Questions to Ask Your Annuity Advisor When Planning for Retirement

Retirement planning is a crucial aspect of securing your financial future, and annuities can play a significant role in ensuring a steady income stream as you transition into this new phase of life. Having a knowledgeable annuity advisor is invaluable, but ensuring you're asking the right questions is equally significant. As you prepare for this important conversation, consider these three essential questions to help guide your retirement planning journey.

1. What Types of Annuities Are Available?

Understanding the different types of annuities is crucial, as each comes with its own advantages and potential drawbacks.

Your annuity advisor should be able to break down the key types, which include:

• Fixed Annuities: Provide a guaranteed income with no market risk.

• Variable Annuities: Offer potential for higher returns but come with investment risks.

• Indexed Annuities: Tie returns to a market index while offering downside protection with no market risk.

• Immediate Annuities: An annuity with no market risk. Begin payouts almost immediately after purchase, ideal for those close to retirement.

• Deferred Annuities: Allow funds to grow tax-deferred, with no market risk, and payouts beginning at a later date.

  
  

By understanding these options, you and your advisor can determine which annuity aligns best with your financial goals, risk tolerance, and desired retirement lifestyle.

2. How Will My Annuity Fit Into My Overall Retirement Plan?

With Americans holding over $42.4 trillion in retirement assets, according to NerdWallet, it's essential to consider how an annuity complements your existing retirement savings.

Annuity advisors should help you determine:

• How an annuity integrates with your 401(k), IRA, or other savings plans.

• Whether it provides the level of income security you need.

• How annuities affect your tax situation and withdrawal strategy.

• The best way to balance risk and stability in your retirement portfolio.

  
  

By asking these questions, you can ensure that your annuity serves as a strategic component of a diversified financial plan, giving you confidence in your long-term financial stability.

3. What Are the Costs and Fees Associated with Annuities?

One of the biggest concerns about annuities is their cost structure.

Annuity advisors should provide full transparency on:

• Administrative Fees: The cost of managing the annuity.

• Surrender Charges: Fees for withdrawing funds early.

• Mortality & Expense Risk Charges: Common in variable annuities to cover insurance risks.

• Rider Fees: Additional costs for features like guaranteed income or death benefits.

• Commission Costs: How your advisor is compensated and whether that impacts their recommendations.

  
  

Understanding these fees will give you a clear picture of how an annuity fits within your overall financial strategy and whether the benefits outweigh the costs.

Final Thoughts

Engaging with annuity advisors can significantly enhance your retirement planning, provided you ask the right questions. Understanding the types of annuities available, how they fit into your broader retirement strategy, and the associated costs will empower you to make well-informed decisions.

If you're ready to secure your future and retirement, Protective Planning Concepts is here to help. Our annuity advisors have been guiding clients nationwide since 1983.

When you work with us, you’re working with experienced professionals who put your needs first.

Contact Protective Planning Concepts today at (281) 468-1280 for more information and take the first step toward a secure retirement!