It’s been a while since I posted a blog post, so I want to give you a small update on how I did my annuities.
Well, I had my first one about a month ago, and I’ve already received over $4,000 in savings, so I feel pretty good about that. I also have about $10,000 in unclaimed deposits, so that’s good.
I plan to do a second one by the end of this year, but for now I am going to focus on my current annuity fund, hoping that it will be enough to cover the cost of that first one.
The first one was a bit of a surprise, and I got a nice letter from the bank stating that my account was in good standing. The second one, I had hoped would be a bit more straightforward, but it also seems to have gone quite smoothly. It is actually quite simple, and I got my bank making the necessary paperwork for me to get my money.
This time around, the annuity is a regular, fully-insured, and non-transferrable annuity with a defined benefit. This means that your account has a fixed amount of money that is yours to spend, but you can withdraw or draw on it at any time. It is a bit more complex than a regular savings account, requiring you to enter information about your income and spending habits to get the annuity to pay out what you put into it.
Basically, the idea is that the difference between your spending and your income is your “annuity,” and you can spend that annuity as much as you want without it having any impact on your income. So this annuity is similar to a savings account, except that it’s a “buffered annuity.
The buffered annuity is one of those products that sounds really good on paper. In practice, there are so many of them out there, that it can be difficult to find one that suits your needs. That’s because the fees and rules vary a lot by bank, and the fees for one bank might be different than the fees for another bank, or the rules might be different for the same bank.
To get an idea of how different the fees are, I went to the website of a broker I use, which is a very reputable broker. He told me that an annuity with a $200 fee is the best one for me, and its a $1,000 fee for a $1,000 account. Another bank will charge me an arm and a leg for their account management (a very expensive service), and it can take a month or more to get a decision on my account.
There are also fees for credit cards, but I’ve never actually had to go through them. I know they’re there for a reason, but to use those fees as a benchmark for comparison would be inaccurate, because they’re not really a good representation of the fees banks actually charge.
My experience with buffered annuities is similar to yours. I have 1,000 credit card accounts, and each one requires a fee that ranges from $12 to $300+. And that’s just the fees for the whole bank. For me, a 1,000 account is a lot of money to be paying for something I have to keep an eye on for a month, and I’m a very frugal person.