So we know that Annuities are insurance, and transfer risk to a carrier. Insurance will have a cost, so YOU must first decide what risk you want to offload, before you can make an informed decision about a particular annuity or strategy.
To gain that Zen-like clarity and be in position to make an informed decision, lets get some misconceptions out of the way.
First, annuities have a bad rap with the mainstream financial press. It’s true, and I ascribe it to the Wall Street daze. You know… The starry-eyed look people get when entranced by the glitter of lofty ‘unlimited upside potential.’
“Rule #1, never lose money. Rule #2, don’t forget Rule #1.”
Mainstream media doesn’t understand that an annuity is insurance, and thus constantly poo-poos annuities as ‘poor investments’. It’s an Apples to Oranges argument that stops right here.
Annuities are safety, first and foremost. Don’t forget that safety, like any insurance, has some costs… there are high yield annuities that have drawbacks and there are low yield annuities heavy on benefits.
All have SOME cost. Some more, some less, some a good deal, some a bad deal.
To judge them, YOU must know what you want, need, and can afford, before you can make an informed decision. Fox News or the Wall Street Journal can’t judge them for you….
The other issue with annuities is even more personal….
When consumers approach annuities or annuity sales people, it’s often with a fuzzy goal in mind. You don’t go into a car dealership with $100K in your pocket just to ‘look around’, do you?
No- with that kind of money, you research the car you want, and you pick the color, seat leather, stereo system, and even the wheels, tires, and warranty. Long before you sign the papers you know what you want, and only then do you buy it. A good sales person presents you the options, offers opinion when it’s invited, and above all, listens to what you need.
The good sales person leaves you in the driver’s seat (I know, a trite analogy!)
Annuities should be no different, and it’s a shocking surprise to me that people continuously approach their critical retirement years with an almost negligent disregard for the options and outcomes available to them. They let themselves be steered or sold something without taking personal responsibility and researching things themselves. And that’s where trouble starts.
Well, it’s not going to happen here. The confusion stops here!
As I said before, YOU must know what you want, need, and can afford, before you can make an informed decision. Don’t put your financial future in jeopardy making an uninformed, reactionary decision. And don’t let yourself be “Sold” something inappropriate.
Get The Facts… Then You Decide!