Retirement Planning Checklist
Before purchasing a fixed indexed annuity, consider the following important questions to ask yourself or an insurance agent.
1) HOW MUCH RETIREMENT INCOME DO YOU NEED BEYOND THE RESOURCES YOU ALREADY HAVE?
- Calculate how much you can expect to receive from your 401(k), IRAs, Social Security, and/or pension payments.
- Consider your fixed monthly costs (e.g., housing, food, ransportation, etc), discretionary costs (activities, hobbies, travel), as well as projected costs (medical expenses, inflation, taxes, etc).
- If you do not think your current guaranteed income sources can cover your future costs, you will want to consider other sources of guaranteed income, like a fixed indexed annuity.
2) WHAT IS YOUR RISK TOLERANCE?
- If your current financial plan is comprised largely of riskier investments like stocks, it may be time to bring more balance to your portfolio with a safer product designed for the long-term, like a fixed indexed annuity.
- Data shows most Americans are at risk of an unstable retirement. Only 9% are focused on diversifying their portfolio which is essential to managing financial risk especially when it comes to saving for retirement.
3) WHAT ARE THE SPECIFIC FEATURES OF THE FIXED INDEXED ANNUITY?
- Be sure to discuss the following important questions with an insurance agent before you make any purchases:
- How is the interest calculated and applied
- What are the terms and conditions for receiving payments?
- Are there extra charges for withdrawals if something major comes up in your life?
- What, if any, penalties must you pay for ending your contract early?
4) HOW & WHEN WOULD YOU NEED TO ACCESS THE MONEY YOU PUT INTO A FIXED INDEXED ANNUITY?
- Fixed indexed annuity payments can be received as a lump sum or as smaller payments over time.
- Looking for money in the near-term:
A lump sum may make more sense for you.
- Looking for a steady stream of income down the road:
Smaller payments over time may be a better option.
5) IS THE INSURANCE COMPANY REPUTABLE?
- To confirm that the company issuing the fixed indexed annuity is licensed in your state, check out your state’s Department of
- There are several ratings services that conduct financial analyses and grade insurance companies. These include:
- A.M. Best
- Standard & Poor’s