It’s hard to believe, however, it’s been over a year since I began writing about fixed index annuities, or “FIA’s”, as a retirement income planning strategy. Beginning with the July 11, 2011 post, Shelter a Portion of Your Portfolio From the Next Stock Market Freefall, this has been the subject matter of virtually every Retirement Income Visions™ weekly post. Several of the posts, including the last nine, have been organized into multi-part series.
As evidenced by the titles of many of the posts as well as the number of parts in the various series, this is a highly technical area. Not to mention that there are currently 251 products offered by 40 life insurance companies to choose from.
The following is a list of 12 questions you should ask yourself when considering the purchase of fixed index annuities:
- Are fixed index annuities suitable for me?
- How will they fit into my retirement income plan?
- Should they be part of my nonretirement or retirement investments?
- What are the current and future income tax consequences?
- Should I purchase an income rider?
- When should I begin to purchase fixed index annuities?
- How much should I invest in fixed index annuities?
- Should I make ongoing investments in addition to my initial investment?
- When should I begin to take income withdrawals?
- Which indexing methods should I choose?
- Should I consider products that offer a premium bonus?
- Which product(s) is (are) best for me?
As you can appreciate, these aren’t easy questions to answer individually, let alone collectively. Next week’s post will provide you with guidance regarding how to go about finding answers to each of these questions.
Robert Klein, CPA, PFS, CFP®, RICP®, CLTC® is the founder and president of Retirement Income Center in Newport Beach, California. Bob is also the sole proprietor of Robert Klein, CPA. Bob applies his unique background, experience, expertise, and specialization in tax-sensitive retirement income planning strategies to optimize the longevity of his clients’ after-tax retirement income and assets. He does this as an independent financial advisor using customized holistic planning solutions based on each client’s needs and personality.