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Register now to manage accounts, create MAx Models and get access to our Knowledge Bank.

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Create Account to manage your assets on the Jefferson National Account Management website.

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November 04, 2015

RIABiz: Morningstar Report Suggests Jiu-Jitsu Tactic For Buying Annuities: Game Them Right Back By Waiting

 

RIABiz gathered insights from several industry experts, including Jefferson National’s President Larry Greenberg, to discuss the results from a Morningstar® report. According to the new research, retirees can cut the purchase price of an annuity by as much as 50% if they refrain from buying them right out of the retirement gate. The “when” is at least as important as the “what.” Patience is the key strategy.

Greenberg explains that a retirement plan should be dynamic, as a person’s situation can change significantly. “Some people retire and think ‘I’m going back to work or I’m going to retire and just work less. Since people live longer and generally healthier, being 65 is very different today than it was 30 years ago.” Nonetheless, Greenberg says that for the majority of retirees, having a balanced portfolio is perhaps the best solution.

He goes on about the cost that comes with an immediate annuity. “You’re paying an insurance company and it’s a drag on investments. What was interesting to me is that the paper shows you can be better off taking your investment portfolio and determining how much income it can generate. Your best performance will come from not having an immediate annuity.”

Read more about the tactics for buying an annuity, here.