Just hearing the word “annuities” makes our eyes glaze over and our brain go into some numb state here at Aging Edge, but that doesn’t mean we should totally ignore this aspect of retirement planning. And the Pennsylvania Insurance Department wants consumers to think carefully before doing annuity-diving (just made that phrase up here on the blog to make it sound more fun) themselves.
The department has a new guide, “The Do’s and Don’ts of Annuities,” to assist people considering such an investment, in which typically an individual facing retirement turns over a lump sum to an insurance company in return for receiving regular income over a period of years.
Annuities are intended to be a long-term investment strategy rather than something to meet shorter financial goals, noted state Insurance Commissioner Teresa Miller. Consumers who wish to withdraw money before the agreed-upon schedule of payments is completed face a financial penalty known as a “surrender charge,” which people would be wise to avoid.
The annuity advice in the guide notes the kinds of issues people need to weigh and ask about before making such an investment.
“Make sure you ask about the surrender charges, and before buying an annuity, decide whether you can afford to keep the money in the annuity for the entire surrender charge period,” Ms. Miller urged in a press release.
The guide covers additional issues such as avoiding high pressure sales tactics, making sure everything is documented in writing, working only with credentialed agents and being aware of the mandatory free look period, which allows time for someone to cancel the contract and get money back if the annuity seems like a mistake.
“Annuities can help provide income over a long period of time, and can be part of a retirement income plan. But consumers, especially seniors who will be depending on this income stream, should consult trusted family members or financial advisers and get answers to all their questions before making any purchases, “Ms. Miller suggested.
Upcoming Events in Aging
The Allegheny County Area Aging on Aging is providing a free education series for family caregivers on Wednesday mornings from Sept. 7 through Oct. 12 at its South Side office, 2100 Wharton St. Advance registration is required by calling 412-350-4996.
Orchard Hill Church in Franklin Park is inviting the public to a free half-day seminar on caregiving starting at 8:30 a.m. on Saturday, Sept. 10. Jennifer Antkowiak of KDKA-TV news will be the keynote speaker, and representatives of local agencies will discuss potential coping skills and tools. For more information, call the church or 724-935-5555 or visit www.orchardhillchurch.com.
The Pennsylvania Senior Environment Corps is expanding into Allegheny County, looking for volunteers 55 and older interested in working outdoors on issues such as monitoring water quality. A training session is planned on Sept. 21. To register or obtain more information, call Melinda Hughes at 814-765-1453, ext. 203.
Gary Rotstein: grotstein@post-gazette.com or 412-263-1255.
First Published: September 9, 2016, 4:00 a.m.
