Costs of Different Annuity Types

Annuities may sometimes make sense for a client, but the expenses involved can be difficult to understand and keep straight.

There are usually multiple expenses involved and it’s incredibly important to understand them.

Types of Annuities and Their Key Expense Components

(Source: Fidelity Investments Guide to Annuities)

This doesn’t serve as either endorsement or discouragement with respect to buying an annuity.

But since I definitely get these questions from clients, I like the above table as a tool to visually convey the expenses involved.

(Full Disclosure: I am a Fee-Only Financial Planner. My website is here.)