Posted on 12/16/2021 6:26:05 PM PST by PistolPaknMama
Are there any financial advisers on here with a good knowledge of annuities. Got a situation with lump sum offer and have no idea what to do. Yes, I've read everything I can read, and yes, I've exhausted other resources before posting here, plus my original adviser died. This is a last resort and I'd rather give my business to a FReeper anyway. Please private reply if we can talk/zoom/email. You will be vetted! Sorry for the vanity!
Annuities? DON’T.
Annuity is just an insurance policy. Not a great investment.
Go to a financial adviser.
No mention how old you are, how many heirs or ho much you have.
You can buy an immediate annuity directly from many respectable insurance companies, without going through an agent. They will give direct quotes for the various options.
Or, you could invest the money yourself, which would probably produce a greater total return.
Stay away from annuities. As mentioned, it is insurance. Annuities are never bought- they are sold
Unless you need the money right away, I would avoid annuities.
You will be vetted!
Hear that? Severe penalties for bad advice!
Seriously, an annuity is GIVING your money to a company and letting them dole out a set amount to you every month. If they invest it well, they keep all the windfall. If you die in a year, they keep it all. If inflation hits 15%, you may or may not get an monthly increase, depending on the fine print you sign when you GIVE YOUR MONEY AWAY.
The correct solution: keep tight control of your money. Learn about the stock market. You worked hard to save it. Now work hard to manage it and make it grow.
Go and ask at bogleheads. Lots of good advice.
Triple ‘A’
Always Avoid Annuities
Forget the annuity and take it in cash.
You really need to find a financial adviser who can assess your situation and advise. If you’re doing ok without this windfall, consider an IRA with index funds. They’re cheaper vs. other mutual funds and made up of the best companies today like Apple, Coke etc. If they lose $$, everyone is losing $$.
Annuities are generally not a good investment, but may be suitable for some people. If you buy one - make sure you understand what will happen in case of inflation.
Not necessarily. Some contracts let you share in any gain; some have survivor provisions; most will have provisions that are incomprehensible to an ordinary investors, and most are probably bad deals for most folks. Some can protect principal but at the risk of inflation. And if you don't want to leave any when you die, it can be a way of making sure that happens (and again, not all contracts).
https://realinvestmentadvice.com/the-worlds-most-misunderstood-investment-part-1/
https://realinvestmentadvice.com/the-worlds-most-misunderstood-investment-part-2/
I wouldn't put it in the category of a scam because you do get what you pay for - a guaranteed income for life. But the end result is that now somebody else is building wealth off of your nest egg and handing back to you what amounts to just a modest dividend.
I have an elderly family member who took early retirement some 30 years ago after her husband passed away. Now she's in her late 80s and while she'll never starve, her money situation is always tight. Had she invested in a mix of stocks and bonds, she would certainly be a millionaire today given the 30 years of mostly bull market conditions.
Are you thinking of buying or getting rid of some you have?
If you’re thinking of buying, don’t.
Annuities have been useful to me because there is limit on how much you can put annually in IRA’s. With Annuities, one can put unlimited amounts. And there are NO yearly RMD’s (required minimum distributions from IRA’s after age 70.5).
I bought a whole bunch of VARIABLE annuities and put the funds in index funds. Those have grown a lot, completely tax deferred. The ONLY negative to me with annuities is, there is a 1/4% annual charge for death benefit. That is not issue with stock index funds, but if money is sitting in money market funds, with today’s low interest rates, you will lose as much as 1/4% every year. Overall I love them for the tax deferred qualities and no RMD’s.
Noooo annuities....what my husband, who is financially astute tells anyone who asks.
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