A Primer on Annuities

annuity

I’ve always had a problem with annuities and the main reason is its name. I always thought the name told me what it DOES not what it IS:

an·nu·i·ty
noun
a form of insurance or investment entitling the investor to a series of annual sums.”

But ok, I got over that. What I needed was a Primer on Annuities, so let me share: there are some good reasons to buy annuities and some reasons not to.

Here are my reasons why you shouldn’t buy an annuity:

  1. If you can invest your own money and enjoy doing it.
  2. If you are already pretty conservative with your spending. (An annuity will accomplish this for you).
  3. If you don’t like paying a lot of fees. ( Watch out – many fees in annuities are hidden).
  4. If you don’t like guarantees. (Remember annuity guarantees come at a steep price).
  5. If you are a type A investor that wants control. (Annuities are more of a lock it and leave it play for retirees).
  6. If you like freedom of investing, and to get in and our easily, and you don’t like long term commitment.
  7. If you don’t need to defer taxes (most folk who retire don’t have that need).
  8. If you like individualism (you like things tailored to you).
  9. If you haven’t seen all the annuities out there (there are a zillion).
  10. From your insurance agent if you went to see him to buy insurance.
  11. If you don’t understand it thoroughly.
  12. If you don’t think you will outlive your money.
  13. If you don’t like being trapped into one type of investment.
  14. From a pushy salesman.
  15. If you feel uneasy about it

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