An annuity is basically the combination of an investment and insurance, and I know itsounds confusing but it really isn’t. A lot of people are worried, and there’s a lot differenttypes of annuities out there, but a lot of people are worried that if I saved up a lotof money for retirement, how much can I take out of that? And just to give you an example,let’s say I saved a hundred thousand dollars for retirement, I don’t know how much to useeach year. And on one hand I want t use the money because I saved it for my entire life, Hi I’m Hannah and this is Heather and were from Sticks and Stones Design Group.
We work together with Ryk… on the other hand if I take out too much of that money each year in retirement, what happensif I go through it all? So an annuity comes in to try and answer that question or help people by providing a little bit of certainty. Like let me give you an example; let’s sayI had a hundred thousand dollars that I save for retirement, I can take that hundred thousanddollars and buy an annuity with it. And I’m taking my hundred thousand and I’m exchangingit, and the insurance company that I’m buying the annuity from is going to pay me a certainamount for the rest of my life. So here’s a hundred thousand dollars insurance companyand the insurance company is going to pay me, maybe seven thousand dollars every yearfor the rest of my life. So what happened there? It can be great if I live a long life You can often determined that an oven bake or broil element t is burned out by simply checking to see if … time, I can get well more than my hundred thousand dollars back, but what happens ifI die right away?
I just gave a hundred thousand dollars to the insurance company and neither me nor my beneficiaries or my family members got any benefit from that money. So annuity’sreal goal is to provide lifetime guaranteed income so that you never have to worry aboutout living your money. Now there are other types of annuities out there and the decisionto buying annuities can be challenging for a couple of different reasons, annuities arevery complex, they have a lot of different terms that can be hard for the average personto understand, and a lot of times the people selling you annuities get paid on a commissionbasis. So I think you could see where I’m going with this, if I get paid a thousanddollars to sell you annuity A and five hundred dollars to sell you annuity B, which way doyou think somebody’s gonna steer you? So always be aware of that when shopping forannuities and make sure annuity is really appropriate for you situation first beforemoving ahead and investing in one.