Is an annuity with death benefits for children a good idea or an expensive way to pass money?
It would be $200,000 and cost 3% every year. It seems like an expensive way to tie up 1/2 of my retirement savings.
Answers | 2
You do not need to invest in an Annuity since these dollars are residing within a retirement account. You don't need suspenders when you already have a belt! No need to pay for the annuity when you are already within a retirement account.
You should consider buying a term life policy to insure yourself as the proceeds are not taxable. Also, if you are in a tax bracket where you need to minimize the tax impact, you should first max out all your retirement contributions, etc. then max out your 529 plans, and then look at alternatives.
To be able to give you specific advice, we would need to ask the following questions:
1) How many kids do you have?
2) What are their ages?
3) What are their individual needs?