Annuities and Sinking Funds
1. You need to know how annuities work because many financial planners advise their clients to have them for retirement planning. Do you think that you need them? If so, then how old should you be when you buy one?
• What part does the stock market play in an annuity?
There are three questions that you must consider.
• What if you live too long?
• What happens if your investments lose money?
• What happens when inflation hurts your investment?
• While you cannot predict the future, what directions would you take to decide on the best way for you to plan?
• When should you consider making these plans?
2. Search the internet to find an article or real-world application involving annuities that you find interesting and informative. Present this article to the class and explain why you choose the example. Include the URL for the site you used. Do not copy the text in the site verbatim. You should summarize your findings.