Tax deferred annuities are as secure as the policy language defines. And the policy is only as good as the insurance company that issues it. So it’s important to review the ratings of an insurance company, their financial balance sheet and a brokerage annuity spreadsheet to determine the best tax deferred or immediate annuity available.
Annuities, either fixed or variable can be a good choice for providing retirement income for some of us, depending on particular situations.
The major security concern relative to annuities is the financial strength of the insurance company that you choose or have chosen. You often hear the term "guaranteed income" associated with annuity advertising and marketing. However, if the insurance company that holds your annuity money goes bankrupt, you could lose some or all of your hard-earned retirement money. Some States have funds that can help reimburse some of the many policyholder losses in such failure situations. Also, the Feds can step-in, as we found out several years ago but there is no guarantee that will happen.
So, insurance company failure is a very real concern, particularly with regard to annuities, although bankruptcy not very likely with regard to the most financially secure companies.
The bottom line is that you have to feel very comfortable that your annuity money will be there when and how you are scheduled to receive it. Stay with the strongest companies financially. Ask for documentation of financial strength and ask a lot of other questions. Be as comfortable as possible with the carrier who is going to be controlling your hard-earned money.
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The major security concern relative to annuities is the financial strength of the insurance company that you choose or have chosen. You often hear the term "guaranteed income" associated with annuity advertising and marketing. However, if the insurance company that holds your annuity money goes bankrupt, you could lose some or all of your hard-earned retirement money. Some States have funds that can help reimburse some of the many policyholder losses in such failure situations. Also, the Feds can step-in, as we found out several years ago but there is no guarantee that will happen.
So, insurance company failure is a very real concern, particularly with regard to annuities, although bankruptcy not very likely with regard to the most financially secure companies.
The bottom line is that you have to feel very comfortable that your annuity money will be there when and how you are scheduled to receive it. Stay with the strongest companies financially. Ask for documentation of financial strength and ask a lot of other questions. Be as comfortable as possible with the carrier who is going to be controlling your hard-earned money.