Annuities For Dummies
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If you've made the decision to look for an annuity contract, keep this list on hand and cover every option it gives, so you can be confident you're staying on top of the annuities game.

  • Find an annuity-savvy adviser. Income annuities aren't yet widely used, so not many advisers or brokers understand them. Try to locate a professional who does.

  • Look for a strong insurer. Always buy your annuity from a financially strong insurance company with "Superior," "Excellent" or "Strong" ratings from the major rating agencies.

  • Read the prospectus before you buy an annuity. Annuity contracts offer guarantees, and guarantees are always accompanied by complex exclusions and restrictions that may appear only in fine print.

  • Buy direct and saving money. If you're the self-reliant type, you can save big by purchasing your annuity direct from an insurance carrier or from a no-load mutual fund company like Vanguard or Fidelity.

  • Buy only what you understand. Some annuities are more complex than others. Don't buy one (or any other financial product) that confuses you. What you don't know may come back to haunt you.

  • Be wary of excessive fees. Variable annuities offer attractive options, but the options aren't free. Try to get the benefits you need at a reasonable price.

About This Article

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About the book author:

Kerry Pechter is the senior editor of Annuity Market News. As a reporter who writes about annuities and the annuity industry full-time and as a former marketing writer who specialized in annuities at The Vanguard Group, he brings both an outsider’s and an insider’s perspective to the writing of this book.
A financial journalist for many years, Kerry has written for the New York Times, the Wall Street Journal, the Los Angeles Times, and many other national and regional publications. His previous books include two career guides, A Big Splash in a Small Pond: How to Get a Job in a Small Company (Fireside) and An Engineer’s Guide to Lifelong Employability (IEEE). He is a graduate of Kenyon College.

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