Submitted by Anonymous on
Most of the stories I read are about annuity sales gone wrong and vulnerable retirees losing significant amounts of their nest egg because they didn't understand the product(s) being sold to them.
1. what are warning signs that people can look out for?
2. anyone have experiences where their annuity purchase was successful?
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mc replied on Permalink
Warning Signs
Annuities can be a terrific option for people as part of an overall investment plan. However, they may not be suitable for everyone.
Some warning signs to look for would be:
--A financial professional advising you to place all of your assets into any type of annuity.......The guarantees associated with annuities are often times reduced or nullified if you need to take out more than the amount specified as the "guaranteed withdrawal" or "guaranteed lifetime income" amount.
--Be careful of initial "teaser" rates on fixed annuities.....Often times fixed annuity companies will offer a very attractive first year crediting rate for new contracts. The problem is that the crediting rate for the remaining years on the contract might be much less and might expose you to inflation risk, etc......Also, often times these types of products might have a very long surrender charge schedule attached to them.
--Understand the fees involved.....Ask what the total fees of the annuity will be. Remember, you are buying an insurance product and should expect to pay more than you would for other investment products.