At the highest level, an annuity purchase process should consist of the following steps:
- Develop a financial plan
- Find a financial advisor
- Consider whether and how an annuity purchase fits into the financial plan
A natural question is how one can develop a financial plan without first having a financial advisor. The reality is that there are some basic financial planning steps you can take on your own. In addition, you may very well have separate advisors for the financial planning and product purchase parts of the process. This is discussed in more detail in the next section on financial advisors.
The Financial Plan is the Blueprint and Annuities Reinforce the Structure
Construction of a home is a meaningful project that requires careful planning. A structured plan (a blueprint) is required to assure that a construction project results in a safe and sound dwelling.
Similarly, it is critical that you have a financial roadmap or blueprint for retirement—a period during which your accumulated resources may very well have to last in excess of thirty years.
Think of a financial plan as the blueprint for a successful financial life in retirement. Similar to structural reinforcements that can be used to support a home, annuities can be used to reinforce the foundation of your retirement spending.
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