Equity Annuities
Other than early surrender, is it possible to loose money on “equity indexed annuity”?
Annuities get their tax deferred status by being an insurance product.
As a result the company that issues them could go under then you are out your money. In my state they are insured by the state but you might end up with only getting a portion of your money back with a failure.
Until recently most people didn’t concern themselves much with bank or insurance company failures. But today is a different time.
Be certain of what they mean by “equity indexed annuity”. Some have a minimum that is not much better than inflation but look out for those also have a cap., a maximum that they pay. So you really don’t get the full benefit of the equity risk either.
That said I really dislike annuities. They pay the highest commissions of ANY financial instrument to the agent so they sell them hard. I tell people if anybody recommends annuities they should dump that person as advisor because they are looking to stuff THEIR pockets, not yours. They get payments every year you own them too, just like residuals for people selling other insurance.
Those commissions come out of your return so annuities provide some of the lowest returns. The “equity indexed annuity” is an attempt to hide that criticism.
My reading says the tax deferral with the low return is not a benefit to anybody that has less than $100,000 in annual taxable income. So if you make less than that they are not a good deal for anybody.
I’ll say again. Watch out for anybody that is trying to sell you annuities.
There are better investments, better ways to invest, even with relatively high safety. Like a bond ladder.
Good Luck.
Annuities Fraud, Equity Based or “Bonus” Annuities
|
|
Equity-Indexed Annuities: The Smart Consumer’s Guide $10.41 Few individuals have done more to educate the American public about financial scams than Jay Adkisson. As the creator of Quatloos.com, Jay has helped many thousands of people worldwide avoid being scammed out of many millions of dollars to various investment schemes. The U.S. Senate Finance Committee has twice called Jay as an expert witness on abusive tax schemes. As one of the authors of Asset P… |
|
|
Understanding TIAA-CREF: How to Plan for a Secure and Comfortable Retirement $19.95 TIAA-CREF is the largest private pension plan in the world, with more than $260 billion under management, including an estimated 1% of all shares traded on the New York Stock Exchange. And yet, while there is a wealth of information on IRAs, 401(k)s and other investment vehicles, until now there has been little guidance for the millions of TIAA-CREF plan participants and their advisors. The TIA… |
|
|
Investment Guarantees: The New Science of Modeling and Risk Management for Equity-Linked Life Insurance $79.88 A comprehensive guide to investment guarantees in equity-linked life insuranceDue to the convergence of financial and insurance markets, new forms of investment guarantees are emerging which require financial service professionals to become savvier in modeling and risk management. With chapters that discuss stock return models, dynamic hedging, risk measures, Markov Chain Monte Carlo estimation, a… |
Related posts:
- Equity Indexed Annuities I have a 10 yr. averaging annual reset equity indexed...
- Financial Planning: Annuities : What Is an Equity Index Annuity? An equity annuity index allows someone to participate in the...
- Equity Index Annuities Is an Equity index annuity a good investment for retirement?...
- Learn About Equity Index Annuities ‘Save for a rainy day’ is a wise old saying...
- Equity Index Annuity what do you like/dislike about fixed index annuities — sometimes...
Leave a Comment