I heard the bonus is a gimmick. Is it real?
Yes, it's a real credit from the insurer. But it doesn't always add to money you can take out.
The fair worry
You may have heard bonuses are misleading. I'd want to know what that extra credit really gives you.
The answer
The insurer adds the bonus when you put money in. Where it lands matters: some add to money you can take out.
Others count only toward income or a death benefit, money paid after you die. Some apply only to money put in during the first year.
So the credit alone doesn't settle it. The fair test is whether it outweighs the costs that come with it.
The downside
A contract with a bonus may charge more for early withdrawals, for more years, or both. Other costs may be higher too.
At your consultation
On your free Zoom consultation, your retirement advisor will put the bonus and its costs beside what YOUR money needs to do.
More questions on this topic
- I heard annuities are bad. Are they?Long lock-ups, high fees on some types, and hard selling gave annuities a bad name. Those concerns are fair.
- Do I still pay taxes and take required withdrawals?Yes. Pre-tax money still gets taxed, and an IRA's required withdrawals still apply.
- Can I change my mind later?You can usually cancel for a full refund within a set window, often 10 days after you get the contract. Later changes depend on its terms.