There are a number of types of annuities, which include fixed and variable. Annuities can be used within a retirement plan or outside, in a “nonqualified” plan. Annuities have gotten a “bad rap” over the years, as unscrupulous salespeople put their victims into low performing annuities that had enormous surrender charges if you needed your money out early. Now, there are fabulous annuity products that have no surrender charges, very low management fees, great riders that can be added on, and a certain level of certainty in market performance that is very reassuring.
The phrases “financial planning”, “family finance” and “estate planning” are ones we hear often in the media. There always seems to be one expert or another touting their wisdom or promoting an idea or product. Much of the information out there seems to be contradictory. However, there are some basic truisms in finance, and that is what I will focus on in this chapter.