Response: My first response to this question is that I don't have enough information to answer the question from a financial standpoint. In order to assess whether you are suitable to purchase an annuity I would have to conduct a full financial assessment. Since liquidity is one of the concerns in making this kind of investment, we want to make sure that you have enough money to afford that type of illiquidity in his portfolio.
Assuming you are financially suitable to make this kind of move, I would suggest that you have a very small window of opportunity to do so. Every annuity has a maximum issue age and once you exceed that age the product you are considering is no longer available to you. Looking at the entire spectrum of available products, once you hit age 75 the number of consumer oriented products that perform well diminishes significantly and again at age 80. Once you hit the age of 85, I'm not aware of any annuity product that I would recommend even if it were available. So here are a few things to consider before writing that check:
1. Make sure that you understand the liquidity of the annuity product you are purchasing completely.
2. Even though I don't use variable annuities in my practice, owning or purchasing one at age 83 isn't a great idea. You just don't have enough time to recover from any sort of market correction and the fees will eat you up.
3. Make sure that the annuity you are considering has some type of health care waiver. This allows for additional liquidity if you happen to need your cash while being under some sort of medical care.
4. Make sure there is no surrender charges at death. You certainly don't want your beneficiaries to pay any fees upon your death to collect their money.
Thanks so much for the questions Leon and if there is anything else I can do for you, please don't hesitate to let me know. Stay well.
Click here to add yourself to my calendar for a phone call or meeting!
Carl Barnowski has 25 yrs. of experience as a retirement income expert specializing in principal protected annuities.