Thursday, December 8, 2011

When and How to Use an Annuity

Here is a terrific article by Oblivious Investor on when and how to use an annuity in retirement.

I completely agree with the Oblivious Investor's opening paragraph:
 "Many annuities (maybe even most) are a raw deal for investors. They carry needlessly high expenses and surrender charges, and their contracts are so complex that very few investors can properly assess whether the annuity is a good investment.  
That said, one specific type of annuity can be an extremely useful tool for retirement planning: the single premium immediate annuity (SPIA)."
Click here to read the rest of the article.

Click here to play with Vanguard's automatic annuity quote calculator.

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