Looks like this clickbait needs some improved fact-checking…
August 1, 2023 by Sheryl J. Moore
I was really interested to see an article from Forbes Advisor comparing certificates of deposit (CDs) to annuities.
Click HERE to read Annuity vs. CD
And I was moving right along until I read that there were “three main types” of annuities. Note to self: they forgot structured annuities/RILAs. No big deal.
But THEN, I read this section about indexed annuities:
“Some guarantee your money back even if the index drops while others can decrease in value. Indexed annuities are riskier than fixed annuities. If the index increases or decreases in value, your annuity does too. However, indexed annuity contracts typically set limits on both gains and losses, so you won’t earn more than the cap or less than the floor.”
Nope. Huh uh. Not even close.
Indexed annuities can NOT lose value as a result of the market’s changes.
And to suggest that “your earnings…depend on your age or any other personal characteristics” in a deferred annuity is not accurate. As the author suggests of CDs- “They’re the same for everybody.”
It was also strange to me to see no mention of the Guaranty Fund Association, after the discussion on CDs’ relative safety due to FDIC coverage. Maybe the author is ignorant of the protections that annuities have, in the event of insolvency?
And the IRS waives tax penalties on annuities, in the event of a withdrawal, for a child’s birth or adoption?!? Is that right?!?
Looks like this clickbait needs some improved fact-checking… -sjm