Pricing and Costs of Annuities

Find out how much that annuity really costs over lifetime

Pricing and costs of annuities includes money you pay to the administrator of the fund. These fees usually break down to service charge and maintenance fee and can mount up considerably.

Early withdraw fees are assessed by the program administrator in some cases if you withdraw before retirement. There is also a government-sanctioned penalty that you must pay if the annuity is tax deferred. Consider the following when determining pricing and costs of annuities:

1. Check the administrators charges on variable annuities.

2. Reduce risk of early withdraw penalties by having a safeguard fund when you have tax deferred retirement annuities.

3. Compare funds from annuity companies for the best interest rates possible.

Choose fixed annuities funds with low or no service charges and save more

Shop for the best plans to offer to your employees. Many companies do not charge a service fee in the hopes of attracting more business. They may have an early withdrawal penalty or other fees so be sure to get a full disclosure.

Protect your employees from early withdrawal fees with annuities information

Offer annuities as part of the total benefit package and encourage your employees to take advantage of other forms of saving for an early day. Educate them on the risks of early withdrawal not only about the fees but also about not being prepared for retirement if they do not put the money back.

Shop for the best rates for your annuity program

Check with several companies before selecting the annuity program for your firm. Many offer higher interest rates for longer periods if you choose certain products.

• Consider the pricing and costs of annuities service charges when making your decision. Many times the programs with the highest interest rates also have the highest maintenance costs.

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