Written By: Robert Zimmerman | H&R Advisory Service, LLC
There are many folks who so dislike annuities that they almost go into a panic state at the mention of the word. They have been trained to abhor annuities by many of the ‘expert’ financial gurus that offer their opinions in the media.
If the idea of annuities is so bad, you have to wonder why any of these folks would agree to accept their ‘social security’ check when it comes every month. After all, this money comes to you from the government and is guaranteed for a long as you live. Isn’t that just like an annuity?
With an insurance company annuity, it is possible to know where the money comes from, since insurance companies are required to publish their financial statements. The folks in Washington, however, don’t care to tell us about their balance sheet. Are they pulling money out of thin air so they can give you your monthly check? Are they borrowing it from China?
Or, are they just running the printing presses to pump up their ability to send your money to you every month? If they are simply printing up money, perhaps we should hope that they will never elect to ‘stop the presses’. Then all we need to worry about is trying to make that money buy as much at the grocery checkout as it did last year.
The social security check stops when death occurs, leaving nothing for your heirs. That is the approved system in this country. You have no ‘choice’.
With a commercial annuity, it is possible for you to leave money to your estate, and it your ‘choice’ how to arrange a variety of options with an insurance company, including simply taking a withdrawal from your account whenever the need arises.
Most people understand that to ‘annuitize’ your account with an insurance contract means that you abandon control of the money – same as social security. These days, however, you can obtain a lifetime income guarantee without having to abandon control of your money. It is known as the ‘guaranteed lifetime withdrawal benefit’. If you are one of those who fear annuities, you would be well advised to re-evaluate your position with a fully cognizant adviser.