Your Annuity May Be Working Against You
Most annuity owners assume their money is safe, growing, and protected.
But there are silent forces built into most annuities that quietly drain your retirement — in taxes, fees, and missed opportunities — and nobody who sold it to you had any reason to tell you.
Most retirees don’t realize how easy it is to make one wrong move with their annuity—and how costly that can be. This guide helps you avoid that.
Danial Fereydani, President
These 10 Common Annuity Mistakes Are Costing Retirees Thousands
The 10 mistakes the annuity industry hopes you never find out about — and what they’re costing you right now.
The Tax Trap
Most annuities are structured in a way that hands the IRS a massive cut — not just on your income, but on what your family inherits. There’s a better way to structure this. Most owners never find out.
The Fee Drain
Hidden fees built into most annuities quietly compound against you every year. You won’t find them on page one of your statement.
The Beneficiary Bomb
If you haven’t set this up correctly, your kids or grandkids could owe income tax on the full value of what you leave them — on top of losing probate time and money.
The Surrender Trap
Many annuity owners don’t realize their money is locked — and accessing it early could cost them 10–15% in penalties alone.
The Wrong Account Problem
Holding your annuity in the wrong type of account is one of the most common — and most expensive — mistakes retirees make. It’s also one of the easiest to fix.
Inside This Free Guide, You’ll Finally Get Answers To:
- Why the IRS is legally allowed to take up to 40% of your annuity — and what to do before it’s too late
- The beneficiary mistake that could cost your family thousands the moment you’re gone
- Why annuitization is often the worst decision you can make — and what to do instead
- How to maximize your monthly income without surrendering control of your money
- The truth about premium bonuses — and the hidden fees that quietly cancel them out
FAQs
How does an annuity ensure I don’t run out of money in retirement?
One of the biggest fears in retirement is outliving your money; whether you have modest means or millions saved, the same fear exists according to documented surveys from those retiring. One of the greatest concerns is financial uncertainty especially when it comes to stock market risk affected by events outside of one’s control. Fixed and fixed index annuities are free from market risk and offer lifetime guarantees that allow you to maintain majority control of your entire account value.
Can an annuity protect my returns in volatile markets?
Annuities are not just for income. Many retirees use annuities to diversify for safety similar to the way they would use bonds in a stock/bond portfolio. Fixed-index annuities are designed to give fixed-income interest gains that compete with bond returns while eliminating the credit risk associated with bonds. Annuities always have built-in safeguards for guaranteed lifetime income (protecting against longevity risk) that bonds, US Treasuries, and banking instruments cannot offer. Many retirees use them as the foundation for their portfolio to accomplish steady growth with principal protection.”
How can I avoid unnecessary tax by using annuities?
The last thing anyone needs is an unintended taxable event that could have been avoided with proper retirement planning; that leverages IRS statutes to avoid tax. Annuities are no exception to this type of planning; they are financial vehicles that have many tax-favorable attributes. However, they also have some pitfalls that require proper execution and long-term planning that is specifically tailored to meeting defined retirement objectives. Structured correctly, annuities can be extremely tax efficient and in certain strategies produce tax-free growth and income as well as wealth transfer.
How can I ensure my spouse has a guaranteed lifetime income if I pass first?
Most couples have multiple income streams that continue to pay while both are living such as Social Security, pensions, annuities, investments, and etc. Unfortunately, when a spouse passes some of these important income streams may be reduced or stop altogether. Annuities that are set up correctly in advance can be turned-on if needed to immediately fill the income shortfall and take the pressure of the grieving spouse in making difficult financial decisions.
Is my money safe with these insurance companies?
Most of the companies that offer annuities have been through up and down business cycles for one hundred years or more; facing a depression, recessions, wars, and pandemics. The number one responsibility that insurance companies have is protection of their policyholders. As an independent insurance advisor, Pendo Insurance works with more than 50 of the largest, oldest and most well-respected life insurance companies in the world so our clients have peace of mind regardless of what product they choose.
What are annuities?
An annuity is a contract between you and an insurance company which promises to provide an income stream at a future date for the current premium(s) paid. An annuity can be a good choice for you if you:
- Have a relatively large amount of money that you want to protect from loss. Smaller amount annuities may not offer a guaranteed* or potential return that offsets costs and fees you will pay.
- Are interested in principal protection and a life-long income stream.
- Won’t need access to the amount of premium you pay, for some time.
There are many types of annuities. Each type is designed to meet specific financial needs. At Pendo Insurance, we specialize in fixed and fixed-index annuities because they offer guaranteed benefits such as security and protection for your principal, ensuring it will be there for future use.
Fixed annuities offer a guarantee interest rate, which is typically greater than you would earn in other financial products, such as bank savings accounts and certificates of deposit.
Fixed-index annuities also offer a minimum guaranteed interest rate. However, since the actual returns are linked to a specific market index, you have the potential to earn more than you would in a straight fixed index annuity, without risking your principal. Fixed-index annuities also offer features that provide a lifetime income stream in retirement, acting much like a personal pension plan. You can turn on income payments when you want them and to turn them off when they are not needed.
Many people don’t know all the details about annuity products. Before you purchase an annuity, you will want to know whether or not an annuity can be of benefit to you.
You’ve worked too hard to lose it to something nobody warned you about.
The mistakes in this guide aren’t rare. They happen every day to retirees who did everything right — saved diligently, bought an annuity for security, and assumed they were protected.
They weren’t. And most found out too late.
This guide exists because Daniel found out his clients were making the same costly mistakes over and over — and nobody had ever told them.
Yes, I want my FREE Booklet on Avoiding Common Annuity Mistakes
I am not familiar with financial planners and their services, and for that matter, I have not used any, but when Danial was referred to me I have to say that I appreciate the help and services that he gave and will use him in the future.
I was in a bind regarding an inherited IRA and he was able to save me quite a lot of money (taxes) simply by steering me in the right direction rather than just taking advantage of me during this stressful time.
He also didn’t charge me for the advice, gave me a solution that was best for me, and simply thanked me for thinking of him. All I can say is that he is fair, honest and I would gladly recommend him to anyone who is looking for an honest person/company. Thank you
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I had some questions regarding my 401(k) and I was recommended this company from Pacific life. They were able to answer my questions about contributions, and figure out how to set things up according to my financial needs and goals. I am very appreciative of the help.
Sunny D.
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Called them last week for an IRA booklet, Received the information I asked for and was able to get some questions answered regarding my specific situation. Still confusing dealing with his issues sometimes nice to have some help.
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About Pendo Insurance
Pendo Insurance—a dedicated group of licensed, financial professionals led by president and founder Danial Fereydani—helps people like you create and manage a customized retirement strategy that preserves and safely grows your assets.
Our goal is to help you achieve a financially secure and enjoyable retirement. We specialize in helping people seeking guaranteed income for life, tax-efficient legacy planning and estate planning. As an independent insurance advisor, we work with over 50 different companies allowing us to select the best solution to meet your needs.
Our solutions-focused approach is a key reason that we were recently voted best insurance advisor in Los Angeles by the readers of the Daily News and that Pendo Insurance ranks as one of the nation’s leading providers of income solutions and legacy planning. Click to watch our video and learn more about Pendo Insurance.