Deferred Annuity Question

[InsureGuy5]

Life of the Southwest or American General are probably your two best options. I like the idea of starting them out with a fixed annuity as well.

 

[PowerPlayer]

Hi there Maximas,

Why do they want an annuity? Are they looking for safety, tax deferral, growth or something else?

The average lifespan is about 75 so they need their money to last for at least 30 years, right?

The first thing you have to do is calculate how much monthly income they need in retirement to meet their goals.

Then working backward you can calculate what lump sum they need to have saved by the time they retire that will generate income to supplement any retirement benefits they may have.

Once you know the lump sum they need, you can calculate the rate of return needed in the years they have left to save that lump sum.

AFTER you have calculated all that, you are ready to select a product. Selecting anything before calculating leaves you vulnerable to a lawsuit for recommending a product that didn't meet their goals. Worse yet, not even seeking to understand their goals.

It is a litigious world out there my friend and you don't want to be the reason that you clients fall short of their financial goals.

You need to make sure they understand risk and reward.

With all that being said , I like Allianz and ING but honestly many companies have decent products.

If safety is the clients #1 concern then I would look at an index annuity with no down side risk and attach an income rider to it if there intention of the money is income.

It might be just to pass on to children which in this case you would attach some bonus death benefit if available.

Hope that helps,
James