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Specializing in retirement planning and personalized investment management.



Annuities are in a category by themselves. They usually have a limited number of investment options and are often more expensive. Non-qualified annuities may also have tax limitations. Unlike taxable accounts where capital gains are taxed at lower capital gains rates, if you cash out a non-qualified annuity, gains are taxed at ordinary income rates.

Many annuities also carry surrender charges. These are fess assessed by the annuity company if you cash out your annuity before a certain time period. These charges can be anywhere from 2% - 10% depending on how long ago you purchased an annuity (usually decreasing with time). These surrender charges are how the insurance company recoup the large commission they paid to the agent for selling it.

If an annuity is paying a high interest rate, or has some favorable guaranteed income component to it, it may be worth keeping. Most of the annuities we see do not though. Either way, we’ll review your annuity’s benefits, its current surrender charge (and when it will drop), the ongoing expenses (M&E – Mortality & Other Expenses, typically 2%+) and its investment options to determine our plan of action.