I’m looking to retire soon and a financial adviser wants me to invest half of my $ 700,000 401(k) balance in an annuity. I’m wary of doing that as the annuity’s annual fees total almost 3% and I’m also already eligible for a combined Social Security and pension benefit of $ 70,000 a year. What do you think? –D.H.
All sorts of alarms and warning bells started going off in my head as I read your question. The hefty annual fees and the fact that the adviser wants to put a pretty big chunk of your $ 700,000 savings stash in this annuity are by themselves enough to make me question this recommendation. The fact that Social Security and a pension will already provide you a substantial assured annual income raises even more doubts.