7 Annuity Mistakes to Avoid

Annuities guarantee lifetime income, but they can be complex and expensive.

I am in the market for an annuity for retirement income. What do I need to watch out for when shopping for an annuity and deciding how to withdraw the money?

As you shift your focus from saving for retirement to withdrawing money, an annuity can be a crucial part of your income strategy. An annuity can provide guaranteed income that lasts for your lifetime -- no matter how long you live -- and can be a good way to supplement income from Social Security and a pension. But annuities can be complicated and expensive, and it’s easy to make mistakes. Here are seven annuity missteps to avoid.

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Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.