When an Annuity Isn't the Right Answer

By Greg Stevens · 3 min read

Some of the best advice I've given was "leave it where it is." I'm independent, so I'm not tied to one insurance company or one product. When an annuity isn't the right fit, I say so. Here are the situations where that usually happens.

You'll need the money soon

Annuities are long-term contracts. If you might need the money in the next few years for a home, a car, or emergencies, it belongs somewhere you can reach without a surrender charge.

You don't have an emergency fund yet

Cash comes first. An annuity shouldn't be the place you'd have to pull from when the roof leaks.

You already have a good annuity

Replacing one annuity with another can restart a surrender period and give up benefits you've already earned. Sometimes a switch is worth it. Often it isn't. It should always come with a side-by-side comparison in writing.

Your income is already covered

If Social Security and a pension already cover your monthly spending, you may not need more guaranteed income. Your savings may be better left flexible.

The product doesn't fit the goal

An annuity built for income isn't the best tool for growth, and one built for growth isn't the best tool for income. The right question isn't "Is this annuity good?" It's "Does this annuity do the job I need done?"

If you're weighing an annuity, or wondering about one you already own, I'm happy to give you a straight read, including when the answer is no.