Where is the Professionalism and Common Sense from Annuity Critics?

The majority of fixed and indexed annuities that are sold today have a very generous withdrawal privilege, typically 10% per year, whereby the contract owner may take money from their account, penalty free. If managed properly, this withdrawal privilege eliminates the need to annuitize the contract, in order to get money out for regular income or for emergencies, and provides a liquidity that should be sufficient for anyone who considers this lump sum a significant part of their retirement asset base. By using withdrawals only to access these funds, the entire balance of funds remaining, after the death of the owner, may easily and quickly be passed on, probate free, to the spouse, or to the children and grandchildren. But, considering that the conservative rule of thumb, for someone in retirement, who wants to make sure their nest egg never runs out, states that they must cap their annual withdrawals to 4%, or one twenty-fifth of the entire amount, if the owner of an annuity were to make the full 10% annual withdrawal allowed in their contract, this person would quickly run out of money long before they ran out of life expectancy. So, when critics of indexed annuities are harping on the surrender charges and how an indexed annuity “locks” up the senior’s assets, what they fail to mention is that the terms of the annuity could be the only discipline standing between this person and a retirement of poverty. Add to that, the ongoing option to convert the entire sum into a guaranteed lifetime income, and you will find that an annuity becomes one of the best and most suitable vehicles for use with seniors for retirement planning and conservation of assets.