Retirees Should Run Away From These So Called ‘Investments’
August 23, 2024 by 24/7 Wall St
Lee and Doug discuss the pros and cons of annuities, particularly as a financial product targeted at retirees. They note that while annuities offer a degree of safety, being insurance products with state and corporate guarantees, they often come with high fees and commissions, making them more beneficial for the broker than the investor.
Wink’s Moore on the Market: Well, good thing for these guys that the average issue age for annuity purchasers is 65, not 70.
Here we go with the “high commissioned products” and “pretty high fees” again.
The average commission for deferred annuities is 5.73%. That is paid a single time, at point-of-sale, and averages about 0.81% over the typical annuity surrender charge period.
More than 42% of all deferred annuities have no fees at all.
In the 90’s, variable and fixed annuities were a “go to” for “retail stockbrokers?”
Unlikely.
“It was a huge product many years ago, but [he doesn’t think] there’s much use for them now.”
Bizarre- because annuity sales are greater now, than they ever have been.
An alternative investment of index funds and treasury funds will not guarantee the purchaser an income they cannot outlive; only an annuity can do that.
It appears that “McIntyre” and “Lee Jackson” need an education on annuities. -sjm
