When you talk to a financial expert about your investment in an annuity, the perks continue to add up. The team at Annuity Genius wants to make sure that you don’t over think the benefits of this investment in your financial future by helping you understand what it is that you’ll be contributing to the process. We have broken down what the average annuity will cost annually, but remember, this differs once variables are included also. The type of annuity that you invest in, the company that manages it, and the amount of money that you’re investing are all contributing factors to annual amount that you’ll contribute. The following information is based on the average annuity investment. Also, remember that the richer the guarantees carried through your contract are, the higher the corresponding and contributing costs will be.
- Administrative Fee – usually .10% to .25%
This fee will cover the reporting of your account including the generating of reports, your online security and the access to the account. There are particular annuities that will waive this fee based on the amount that is initially invested.
- Mortality & Expenses Fees – usually 1.0% to 1.5%
These fees provide insurance death benefits in case the contract holder passes away. This compensates the insurance company for any risks with the contract. These fees are one of the fees that variables will determine the amount that they charge. This also depends on the types of benefits that the insurance company is offering you in regards to death benefits and what they’ll return at the occurance of your death.
- Additional & Optional Fees – vary
Insurance companies each offer different benefits and features that add to the amount that you’ll need to contribute annually. Features generate in 3 different categories: income, death and access features.
- Income features guarantee that a cash flow will come from the contract regardless of changes in the market. This type of option is created more for individuals who are looking to start withdrawing from their annuity. Income features can range from anywhere between .5% to 1.5%.
- Death features are generally tied to the mortality fees that we touched on earlier. This is usually something you would personally decide to add on to the amount that you’re contributing annually.
- Access features provide you with the ability to withdraw money from your account without any withdrawal penalty fees. Access features may be included in your annuity contract, but may be an additional feature for others.
Overall, your annuity investment can cost you anywhere between 1.75% annually to over 3.25% annually, all based off of what it is you want out of your annuity contract. This will all vary on the benefits that you want or any additional features you’d like to add. For advice from financial experts, you can contact Annuity Genius. Our team of professionals will break down the features and benefits of each annuity product so that you can ensure that you’re receiving the best possible fit. Contact us today to schedule an appointment. Get started on your retirement funds today!