Should You Purchase an Annuity?

A question came across my desk – A FERS employee asked me whether or not they should buy an annuity as they reach their FERS retirement age?  Anytime I get a question like that other than saying find a Registered Investment Advisor (RIA), is why would you purchase the annuity and for what purpose.  Many of us do too many things without knowing the WHY.  We do know that working everyday and preparing for today and not enough.  It is necessary to work today and plan for today and tomorrow, often making sacrifices today so that there will be a bright future tomorrow.

In a country as wealthy as the United States, albeit disproportionately distributed, too many people are retiring without being ready.  They are neither emotionally nor financially ready to retire.  Whose fault is it that they are not ready?  Well to position one’s self for such an argument is useless.  The entire populace would be better served if we determined why we are not ready to retire and look for ways to remedy the deficit and fix it.  A financially and emotionally healthy retirement population is an impetus for growth in the national economy.

An annuity by its very name indicates that there will be the presence of some dollar amount for a life time.  Every retiree desires guaranteed lifetime income.  Many of the financial instruments on the market are somewhat difficult to understand and require the services and expertise of trained individuals familiar with those products.

I believe that anything worth your money is worth you evaluating why and what you need it for.  What kind of benefit do you expect to derive from you purchase or investment?  First things first.  Should you purchase an annuity?  You should read as much as possible about annuities so when you decide for or against the purchase you will have enough intelligence about the subject to feel comfortable with the decision you make.  Never put yourself in the position of having someone else do your thinking for you as long as you can do it for yourself.


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