From 24/7 Wall St. · Jake FitzGerald · · 1m 10s
5 Expensive Annuity Fees Retirees Ignore
Retirees pay hidden annuity fees that climb even as accounts drop.
In brief
Retirees pay hidden annuity fees that climb even as accounts drop. Retirees face five hidden annuity fees that can grow faster than their savings. Originally reported by 24/7 Wall St..
What Retirees Pay Without Realizing
Retirees hold $8.5 trillion in annuities but rarely see the fees that cost them money.
Surrender Charges Penalize Early Exits
Surrender charges let insurers recover agent commissions when you withdraw more than the free amount.
Mortality and Expense Risk Charges
Daily charges cover death benefits and sales costs, built into subaccount returns.
Administrative Fees Buried in Fine Print
Annual fees cover recordkeeping and customer service, often based on account value.
Rider Fees That Grow Faster Than Accounts
Rider fees can rise through roll-ups even when account value falls.
Subaccount Expenses Stack on Everything
Subaccount expenses reduce returns before contract-level fees are applied.
How Commissions Get Built In
Agent commissions are built into contracts and recovered through ongoing fees.
Rising Living Costs Matter More
The R-CPI-E index for Americans 62 and older rose 0.5% in September 2.
Questions to Ask Before Signing
Retirees should check annual charges, surrender periods, and rider needs.
The bottom line
Retirees face five hidden annuity fees that can grow faster than their savings.
