While shopping for any kind of annuity you must have certain goal in your mind so that you make right choice about annuity. You must have got good price while buying your annuity and expected a great return. However, for many it does not turn out as you had expected.
Therefore, while buying annuity you must follow the following few tips.
- Do not buy at too early age or too late
You will not get any special benefit by buying annuity when you are too young and thinking that you will accumulate lots of money after retirement. However, it is not so. The other person buying much later will also get almost same returns that the former will get. However, you should not wait too long, as number of insurance companies do not sell annuity after you reach certain age.
- Choose to buy annuity when interest rates are bit higher
It is suggested that you buy the annuity when the interest rates are high. In order to invest wisely, it would be better that you study and analyze the market on a daily, weekly and monthly basis. This way you’ll know when the interest rates are the highest.
- Pick your right option and only pay for that
More you add your option then your payment will be much lower. You can select your agent from the Policypedia and discuss with him about various options to choose based on your future plan. As an example, suppose you have no dependents then prefer to buy only the basic annuity, which will allow you to enjoy the highest returns on your investment. In case you also have life insurance in your name, then there is no need to taking joint-and-last-survivor type of life annuity.
- Don’t leave any additional options if that can benefit you
Besides getting your regular payment you must also get additional payments based on the options that you have chosen. Let us take an example, suppose you do not have any other source of income during your retirement period, then you can opt for indexing option so that it will make sure that you will get your payment based on current inflation rate. In case you have not chosen this option then you will find that your payment is too low as compared to present price index.
- Never put all your savings into any single annuity
There is a famous saying that never put all eggs in one box. In the same way you should not put all your savings in any single financial product, even if it is the annuity. Just imagine, if you need any emergency money due to any medical reason then you cannot withdraw your money from the annuity before its term. In case you do premature withdrawal then you have to pay a very high penalty. Also, once you put all the money, you cannot change the option.
If you follow the above mentioned strategies, you are sure to buy the right annuity. You could also explore the market a little on your own before buying it.