Given today’s low interest rate environment should a 70yr. old buy a fixed immediate annuity?
I understand that the monthly dollar amount of the distribution from an annuity would be less today than say a year ago because of the low current interest rate environment that exists.
No, no, and no.
Unless you really know what you are getting into.
Annuities carry fees that can easily eat up 5% of your money.
Be careful about crooked financial advisers and remember they have familes to feed and BMW payments to make.
Stay away from crooks.
Call Charles Schwab discount brokerage
Tell them you are looking for an annuity at low cost that will deposit monthly amounts directly into your checking.
They will probably set you up a cd annuity.
In other words, they will take all your money and invest it in cd’s that pay monthly.
They will sweep it monthly and mail you a check.
They will want to know how much of the principal of your investment you would like to take out also.
At your age you can take out 4% safely.
THEY WILL TAKE CARE OF YOU.
Be careful whom you trust out there……
It depends on your current financial situation. If you are dangerously close to possible outliving your savings then i would take a look at what the payment is per month and see if it meets your needs. The pricing on Immediate annuities have more to do with the annuitants age over the current interest rate. the older you are the more you will receive per month when the contract starts. Also be careful. There is world of difference between annuities and the companies that offer them. Some offer riders that allow the payment to adjust with interest rates, some guarantee that if the original principal amount isn’t paid as income before death then the remainder shall be paid to beneficiaries and others simply keep it.
Hope this helps!
Even if I wasnt 70, I wouldnt go anywhere NEAR an annuity.
Make a better use of your money and set it into fixed income investments such as US treasuries et al…
Remember these 2 rules as it pertains to annuities…
Rule #1—–Annuities do NOTHING except make the insurance company that issues them money… PERIOD….
Rule #2… NEVER forget rule #1….