Part 3 – Annuities: Beyond The Basics

How does an annuity fit into my clients overall investment plan?

To decide whether an annuity is appropriate for your client or not takes a little bit of analyzing. If your client is younger than 59 1/2 you need to be sure you will not need to use these funds prior to this age. The IRS imposes a 10% penalty on funds that come out of annuities prior to age 59 1/2. Surrender charges are another aspect of the annuity your client needs to consider. Be sure that the annuity you are considering has surrender charges that are comfortable for their situation. Do you know what type of an annuity you are considering? Be sure that it fits your clients’ investment temperament.

When considering an annuity, you need to do your homework and be sure that the product is suitable for your client. These are a few of the nuances you need to be aware of. Remember, it is their money. Take your time and make sure your client understands where it is going to be invested.