Please help me to choose my Annuity!?

Question

I am 44 years old. I am thinking to invest $200.000 for my retirement since I will have nothing from SS. I have two options from two advisers for my annuities. I have no ideas which one is right for me.
One is Variable annuity from Jackson National with 8% return, guaranteed life income and Death benefit. The adviser said I have a good chance with more then 20 years( till I am 65y) time to let the money grow, but I am worry about my principal. Another one is fixed annuity from Allianz, the adviser said I can have my principal safe. I have no idea which one for me is right. I just want to have my life settled to the end and hopefully to have something left for my son after I passed. Please help with your advice. Also how much I can expect to pay the Tax when I start to withdrawal the money after I am 65 years old? Thank you! Please be honest and serious help!

Answer 1

You need to get an independent investment advisor.    Try reposting your question under "investments" and not insurance.

Answer 2

Honestly purchasing an annuity right now is not a good idea. Thanks to our low interest rates, the payouts on annuities are dreadful. So anyone who purchases an annuity now will be locking in at a low interest rate thereby locking themselves into low returns for life. Therefore if inflation increases and I am sure it will, your purchasing power is severely diminished.

Remember there are no cost of living adjustments so your income decreases over time and the fees for these investments can be very costly.

At your age you should be looking for other investments with higher returns.

If you still want to buy an annuity, wait for the rates to go up or stager your purchases throughout the years to avoid having all your money locked into today’s lower rates.

The thing to remember is that if at some point you think your annuity purchase was a bad idea if you can surrender the annuity to the insurance company but many times you cannot cash out if you already started receiving payments. Also you may get hit with surrender fees not to mention the value will be less. Or you can sell all or a portion of your future payments on the secondary market for a cash lump sum.  The amount of money you will receive is larger than the cash-out value from the insurance company and you won’t be subjected to surrender fees. However there is a discount rate so again your principal will be less.

Please find yourself a reputable financial planner who isn't tied to a fund or insurance company to help you determine your best strategy for retirement