At the stage in your life when you need to start thinking about investing in an annuity? Read through our seven deadly sins of annuity investments to help you avoid making the wrong decision!
Annuity lust is when people expect more than they are entitled to, in the form of annuity rates. It is important to be realistic in your expectations or you will set yourself up for disappointment. If an annuity sounds too good to be true, then it probably is. Always do your research to make sure that you are not manipulated by annuity providers.
Avoid getting carried away with buying annuities. Just because you buy a lot of annuities, doesn’t mean you stand a better chance at gaining a higher income. It is all about finding the right balance and carefully selecting annuities to suit your circumstances. You need to make sure you come up with effective annuity strategies that provide solutions to problems you face.
Don’t get greedy with investment-linked annuities or you may end up living on minimal level income.
Annuity greed comes from basing your product choice solely on income expectance, for example choosing an investment-linked annuity without weighing up the risks. Make sure that you carry out research on annuities so that you stand a better chance at choosing an annuity that will actually benefit you during retirement. Always look at the risks annuities pose and make sure you diversify your retirement portfolio. A good financial advisor will recommend that you do not put all of your eggs in one basket.
Annuity pride occurs when people buy annuities without fully understanding the terms. Many people have too much pride to admit they don’t understand the way specific annuities work. This can often lead people to choosing the wrong annuity investment and regretting it when it’s too late to do anything about it.
An annuity is a contract so you need to make sure that you have thoroughly read through it before you sign it. Annuity sloth is when people fail to do research and end up with the wrong type of annuity, or fail to read it through and end up being caught out by their contracts terms and conditions. Always get a third party, like a solicitor, to read through your annuity contract and make sure you ask the provider questions if you require clarification.
If you are too lazy to research annuities, you may end up choosing the wrong product.
Just because your friend is bragging about a great annuity deal they got, doesn’t mean it’s the right one for you! Do not just buy the same annuity as your friend because they have recommended it. You need to make sure you look at all of the specifics of an annuity and see whether it suits your needs and requirements. You will also benefit from shopping around to make sure you get the best rate. If in doubt about the best annuity for you, seek advice from an independent financial advisor.
Many people fail to carry out the necessary research into annuities and end up getting angry at their annuity provider, when they feel like they have been mis-sold a product. Others get buyers’ remorse due to the fact they didn’t carry out adequate research. Another form of annuity wrath is when individuals fail to consult their partners regarding their annuity. It is always best to discuss your annuities together before making a purchase.
From reading through these seven deadly sins of annuity investments, you have probably realised that the key to avoiding problems associated with annuity investments is to carry out thorough research. When it comes to annuity shopping, knowledge is power; I found this really interesting site about annuities which is well worth a look. Knowledge will help you make a more informed decision and will lessen the risk of you choosing the wrong annuity.
Image credits: See-ming Lee & susivinh