Professionals familiar with retirement income often suggest that buyers by wary of fees and charges attached to annuities before purchasing them.According to the California Department of Corporations, this is what prospective buyers need to know:
1. In the event you need to withdraw your money prior to the annuity maturity, understand the surrender charges.
2. Know your acceptance of risk in order to properly judge whether fixed, variable, or indexed annuities fit into your retirement plan.
3. Annuities are not guaranteed by any government agency. Check the financial status of the company you are buying the annuity from.
4. Make sure your salesperson and the company are properly licensed and registered.
5. Understand annuity differences if you choose to cash in and purchase a different one.
6. Annuity commissions are sometimes very high. Find out how much your agent is profiting by the sale.
7. Make sure you understand what will happen to the proceeds of an annuity upon your death.
8. Comparison shop and discuss the option with your financial advisors.
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