April 23, 2019

Don't Be Fooled. Annuities Are a Bad Idea

““I’d die and go to hell before selling an annuity” (to you or anyone).

You may have seen me on my firm’s long-running TV ads saying that. Over the top? Yep!

That bluntness aims to cut through the soft, misleading, and in my opinion, near-criminal “guarantees” annuity firms have peddled for decades – to investors’ detriment. Whatever you think an annuity can do for you, it can’t. Or there is likely a cheaper, better, more flexible way to do it.

Note: I’m not referring to simple immediate “fixed” annuities that convert one lump sum to income. Those can be OK, done right. But deferred annuities – “variables,” “indexed” and “deferred fixed” – are bogus. Here, you upfront cash for a contract that pays later. Meanwhile, your principal contract value supposedly grows.

They’re usually marketed as safe investments, with guaranteed income, when you’re ready. Most buyers never see the truth. It’s buried in huge, complex, jargon-filled contracts that normal folks can’t understand without a dictionary, gallons of coffee and a claimant’s lawyer. Few read them.”

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