Question: “I just got an inheritance and a financial person suggested I purchase an annuity with $90,000. We were going to expand our home. I do want to be smart and do something wise for the long term with the money. What is an annuity? Is it a good investment?”

Christine’s Answer:

Good for you for wanting to learn about money.

First, the annuity answer. An annuity is an insurance contract. There are many types and forms from fixed annuities to variable annuities which have an investment component. They are backed up the insurance company that sells them. If this financial person only suggested an annuity, then they may only sell annuities. Annuity is a product with a large commission for the sellers typically. If an investment person does not offer you more options, they may not be working in your best interests.

Expanding your home sounds like an option, but do you have a financial plan? Use that inheritance wisely by consulting an objective financial professional first. You can meet with them on an hourly basis and they can evaluate if you have a safety account, how to manage any debt you may have and plan for your future. They can also further explain annuities and other options to best serve you. To contact one that does not sell products reach out to the Garrett Planning Network.

Once you are more educated you can decide your next steps.