http://www.city-data.com/forum/perso...insurance.html
I was given some good information on the above post.
I did look into it and have been getting quotes from my insurance agent. It isn't easy to read through all of the different quotes. You will need a high tolerance for boredom. These are very twisty sort of contracts and every twist adds an expense.
One of the things you have to think about is that the younger you are when you purchase it, the less it will cost, and vise versa. I have been given several quotes for $100K single premium payment that will generate $50K annually when I am 85. I have the option of starting earlier than 85, but that reduces the annual amount that I receive.
You have to keep in mind that the value you are purchasing today is going to be eroded by inflation tomorrow, so you really need to calculate the future purchasing power of what you are buying and should have some idea of what you think you will need.
You also have to be comfortable giving an insurance company the money now and not have access to it until a long time in the future. You usually cannot change your mind once you have handed over the money.
For tax planning purposes, you also have to keep in mind that depending upon how the annuity is purchased it is taxable and will affect how much of your social security is taxable and the tax bracket that you are in.
Now that I have spoken with my insurance agent, I will be meeting with a retirement planner soon to go over all of my options. I will then speak with a CPA to review the tax side of things.
Scientia potentia est ... knowledge is power.
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