The Devil In The Details Of Annuities
May 2, 2020 by David Kudla
Chances are that if you are approaching retirement, you have been contacted to purchase an annuity as an investment vehicle. It has been most likely marketed as a way to get “guaranteed income” or “market-like returns with only a fraction of the risk”.
Wink’s Note: “Annuities” cannot be lumped altogether, in one fell swoop.
While it is true that annuities are “…designed by annuity companies to take your money and earn more than they will pay out to you,” there is no mention here that in return the purchaser receives a guaranteed paycheck for the rest of their life.
The author is quick to suggest that “Now may not be the best time to lock into these rates with your capital,” but it isn’t always about ROR. The top fear of Americans is running-out-of-money in retirement.
“…fixed annuities are often cheaper than variable annuities” Fixed annuities have no fees at all.
“The more complex the annuity, the more room brokers have to hide and disguise fees associated with them?” The insurance company determines any fees, not the salespeople.
We won’t even comment on the closing sentence at this time.