Given a dizzying number of features and restrictions, contracts for some annuities — variable and otherwise — can run 300 pages or more. And because each comes with its own small twists, these products can be very difficult to compare.
Thatand the fact that annuities tend to pay a lot higher commissions than comparable mutual fundsis the main reason I’m not a fan of annuities.
That said, Barron’s has their annnual list of the 50 top annuities out today.
The market has changed:
“We’ve seen investment options in variable annuities diminished, guarantees brought down substantially and fees going up,” says Nigel Dally, an analyst at Morgan Stanley. “Protracted low interest rates and high volatility in the stock market have made it far more expensive for annuity companies to support their products.”
My thought: Stick with low-cost fixed immediate annuities. Put a portion of your assets in one or two fixed immediate annuities to give you some dependable monthly income and invest the rest of your assets in a conservative portfolio of stocks and bonds. It’s not rocket science but advisors try to make it that way to confuse and scare the hell out of people.
As far as the rest of annuities are concerned: BUYER BEWARE!