Important Questions You Should Ask Your Advisor About Annuities
1. Can I lose money?
No. Immediate annuities, fixed annuities, and the insurance company that issues the contract guarantees fixed index annuities. Your principal is protected by the claims-paying ability of that company. Of course, excess withdrawals may result in surrender charges and if you are under 59½ and make withdrawals, you are subject to additional tax penalties.
2. Will I pay a lot in fees?
No. Unlike variable annuities, which was an investment feature (and in our experience have fees that can get as high as 8 percent), the annuities we promote either do not have any fees for the base contract, or have low fees for additional riders you may choose, such as inflation protection, lifetime income, spousal continuation, death benefit, etc. Those fees are typically less than 1 percent each.
3. Will my cash flow fluctuate?
No. Fluctuating means your income can swing up and down from month to month, or year to year, depending on how you have it setup. With the annuity strategies we recommend, your income can only go up, to provide a hedge against inflation and potentially increase due to index-linked interest rates. Income can ride every year you wait before turning in income. Your cash flow will not decrease, that you can be assured of.
4. Will we be able to keep our money if one of us becomes ill or passes away?
Yes. There are many annuities or additional riders that have waivers for terminally ill or premature death situations. There are annuities that may provide double or even triple your income for qualifying healthcare expenses. Many annuities or additional riders offer death benefit provisions as well. A well-researched annuity strategy designed for your specific needs and goals is the best way to go.
5. Can these annuities provide me with income for the rest of my life?
Yes. With a fixed index annuity, you can select the option to purchase a lifetime income contract. Some are structured that way; some add this feature through a rider for an additional cost.
6. Does my income have the potential to grow to keep up with inflation?
Yes. This is something people don’t often think about, but we do. In our annuity strategies, we leverage annuity features and riders to help ensure our clients’ income grows as the cost of living increases. We want you to retain the purchasing power of your money.
7. Can I directly name my beneficiaries and bypass probate?
Yes. You can directly name individual beneficiaries on any annuity contract and completely bypass the probate process (however some earnings may be taxable, such as IRAs and qualified money will certainly remain taxable). But, the transactions (death benefit) remain private and stay out of the public eye.
8. Will I completely lose access to all my money?
No. You do not have to annuitize. You want to make sure you select the right annuity type and features for you r own unique situation, but many offer up to a 10 percent annual withdrawal without penalty (as long as you're over 59½ - otherwise you incur a tax penalty) and you do have the ability to get more (or all) but you'll pay a surrender charge. (Please note that the annuity you purchase will probably have a penalty period for the first three to 15 years, with a sequentially decreasing percent charged against your withdrawal funds for excess withdrawals or full surrender of the contract. So you should not purchase an annuity with money you think you may need in the near term.)
9. Can I get even more income by “laddering” annuities?
Yes. Oftentimes, with well-planned-out annuity strategies and payout management techniques, like we' re known for, using more than one annuity for income - engaged at specific points in time - can net most people with higher monthly and annual payouts.
10. Is it really possibly for me to get 33 percent more income with Doug Wheeler’s annuity income strategies?
Yes. We use unique concepts with exclusive products that less than 1% of agents in the United States have access to. Our highly trained, qualified and objective financial professionals are given access to these products and our proprietary strategies to help ensure that they are only placed with clients who are most suited to use them.