Well, it finally happened. The check actually was in the mail and it came right on schedule, too. Twenty years ago, I decided to add an annuity to my retirement planning program and it kind of snuck right up on me. That was a really pleasant surprise. In a world where the annuity often has its detractors (and perhaps with good reason), I am pretty happy with it. I felt for me it was a good decision. Depositing that annuity check for $483.46 (the first of 240 for the next 20 years!) has comforted me quite a bit since February 1st. With the market in chaos, even more so in the past several weeks, I guess it’s congratulations to me! I made it to annuity day and now another of my nest eggs has hatched!
What Is an Annuity?
An annuity technically is not an investment. First and foremost, an annuity is an insurance product, which means you buy it because it reduces your risk. Some annuities, like variable annuities, do have a selection of stock and bond portfolios available as investment choices inside the insurance contract, but the one I bought was a fixed rate annuity which for me had no investment risk on my return and payout. I knew 20 years ago what I would be getting back to the penny when I bought it.
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