DYADT? Does Your Advisor Do This? – Objective Annuity Review

People typically buy annuities to help manage their income in retirement. Unfortunately, annuities sometimes offer security at a high price.

Many annuity owners understand the concept of a surrender fee – a penalty you pay if you take money out of an annuity. Typically surrender fees are higher if you withdraw funds within the first years of the annuity agreement.

At Annex Wealth Management, we offer an Objective Annuity Review – a review of all the costs and benefits of your annuity product, and if it is indeed serving you and your goals. You may have a handle on the framework of your annuity product, but some owners are less aware of fees and charges like

• Penalties like tax consequences. If you withdraw money from an annuity before you are age 59 ½, you may have to pay a 10% tax penalty to the Internal Revenue Service on top of any taxes you owe on the income.
• Administrative fees, where you’re being charged for record keeping and other administrative expenses. This may be a flat annual fee, or a percentage of your account value.
• Mortality and expense risk charge, which often is equal to a certain percentage of your account value, typically about 1.25% per year. This charge pays the issuer for the insurance risk it assumes under the annuity contract. The profit from this charge sometimes is used to pay a commission to the person who sold you the annuity.
• Underlying fund expenses, where you’re responsible for the fees and expenses for underlying mutual fund investments.
• Fees and charges for other features, including initial sales loads. Additional fees sometimes apply for special features, like a guaranteed minimum income benefit or long-term care insurance

Since we don’t have any products to sell or commissions to earn at Annex Wealth Management, we will give you an honest assessment of your investments, including the sometimes-complicated inner workings of your annuity.