Should I ? My broker is trying to sell me one and I’m balking for some reason. I understand the absolute basics of this investment and am looking for independent opinions as to whether this is a good idea.
He will probably make a great commission off of it.
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He will probably make a great commission off of it.
+1.
I always hated those products when I was in the biz! There was no f-ing way that any annuity I used to sell was going to give a return of 7-10%, after bank/insurer/investment firm paid themselves and they paid me. Your better off in penny stocks.
Is your broker “churning”?
Without knowing your individual circumstances, there is no way to tell you whether you should or shouldn’t. While variable annuities have a bad rap, there are times when they do make sense.
That said, never make an investment unless you understand it fully and are certain that it is right for you. If you are uncomfortable, tell your broker your concerns and ask him/her to offer other suggestions. There is are many ways to invest successfully, keep at it till it feels right to you.
Well, mostly retired people need/use annuities. So if you are retired and need a monthly stipend, then go for it.
Is your “broker” an insurance salesperson or banking investments manager who call him/herself a broker?
There are very few times when an annuity is the right answer for the investor in my opinion. Fundamentally you are placing a bet with an insurance company (and their team of actuaries) that you will live longer than they expect you to.
http://www.fool.com/retirement/annuities/annuities.htm
They get it about right.
My last human broker I told up front, “I will walk out the door if you try to sell me an annuity.” About 10 minutes later he forgot and tried to sell me an annuity. I walked. For many brokers it’s just in their DNA. Annuities are their big money-maker, so they just robotically push annuities. That’s part of the reason I don’t use human brokers anymore.