Making Sense of Reverse Mortgages Information you need to make a good decision!

February 24, 2010


Filed under: Annuity,Reverse Mortgage — Tags: , , , — Scott Larson @ 4:41 pm

Annuities are in the news again after President Obama has suggested that an annuity might be an appropriate choice for some people.  As with any financial investment when they are appropriate they work well. As I was working with a Fidelity account today they had an article that showed how an annuity can be a way to accomplish some more complex financial goals such as replacing savings that you would like to be able to pass on to your heirs.But as the Fidelity/Wall Street Journal states

Buying an annuity confronts families with a dilemma: Should a parent take smaller monthly payments so that their surviving spouse or children can get some sort of inheritance?

Most people opt for the smaller payment. But in some cases, there are better strategies to help the heirs come out ahead, including pairing an annuity with an insurance policy.

But annuities come with complex features and fees that you won’t often find in investments like mutual funds. You can purchase riders to guarantee payments for your heirs, for example, or to adjust your monthly payment for inflation. It takes careful analysis to figure out if an annuity makes sense for you and, if so, which features to purchase.

Many states, including California, have laws which provide a “financial  fire wall” between reverse mortgage lenders and annuity providers.  These are designed to keep an aggressive salesperson from overwhelming a senior and making large commissions from selling inappropriate products. 

To read the whole article click here

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