Jill on Money with Jill Schlesinger Any Reason Not to Buy the Annuity?
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Jul 16, 2025 A listener grapples with the enticing option of using pre-tax funds to buy an annuity, sparking a lively discussion about the pros and cons. The hosts navigate the complexities of retirement planning, highlighting the importance of weighing financial choices. They also tackle the challenges of caring for aging parents while supporting adult children, emphasizing savvy financial strategies. Annuities are demystified, revealing their potential as a security blanket for retirement, with a call for professional advice to aid decision-making.
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Why Annuities Cause Skepticism
- People often distrust annuities due to high fees and loss of liquidity.
- An annuity transfers investment risk to the issuer in exchange for a steady income stream.
Eric's Annuity Opportunity
- Eric, age 65, considers buying a state-offered annuity with $590,000 from his deferred compensation.
- He can use all, part, or none of the money to buy the annuity or keep it invested with low fees.
Eric's Comprehensive Financial Picture
- Eric and his wife have substantial assets: paid-off home, vacation property, cash savings, IRAs, and ongoing incomes.
- They also have four sons, one of whom recently moved back home, and Eric's 91-year-old mother still lives independently.