re: Annuity Question for Money Board?

So why does she need the income again?

I don't think she needs it but is not sure what to do with the lump sum. I know everyone says go talk to a financial planner but that seems to be a hard sell to her.

Well unfortunately you can only help those who want to be helped..

I do know what her tax bracket will be (at a minimum) if she doesn't use a tax deferral strategy. Unless the fees are 20+% over 3 years, it's going to make sense for her.

I never said that annuities were bad. I have also sold them in the correct circumstances for 20 years. I said not to annuitize them(settlement option), if you have heirs you want to pass the principal to. Once you annuitize it, it is the company's money. That is not absurd as someone suggested. It is the way it works. The company will pay for life or a fixed period if the annuitant dies before the fixed period has been reached. She should understand how they work. This financial product is not for everyone. It is a good option for some. Some companies allow an interest only option where the owner can draw the interest or leave in the policy tax-deferred. Upon death the beneficiary receives the policy value(best choice IMOHO). It is a great tool to avoid probate and insures that the money goes where you want.

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