[USER]

Hi everyone! I am wondering your feelings about annuities. I have just 20 percent in annuities and the rest in IRAs/401k.

While the market is hot and I see gains I am thinking of moving some of my investment to more guaranteed annuities (50 percent or so).

Do you like them or not? I am 53. I don’t want to disclose my portfolio balance, it is a decent amount but not a multimillion etc.

Thank you so much for your thoughts!!

[Fisher]

I’m not a huge fan of annuities. I’d rather invest in ETFs that provide monthly income with no required contract holding period that most every annuity has.

[Jessica]

What is the purpose of an annuity? Genuinely unfamiliar with what they are and what benefits it would have.

[Ben]

What kind of annuities? There are many different types. Asking for feelings about annuities is like asking for feelings about vehicles.

Are we talking sedan?

Motorcycle? Semi truck?

[Jesse]

Annuities are not investments. It is an insurance product. Contracts protect the insurance company.

I wouldn’t throw 50% into it. The only I would consider is the direct payout annuity. Give the insurance company a lump sum and they will send you a stream of money every month.

The current rate of return on that money is less than the current CD or HYSA rate. Not good at this time, it was great when the interest rates were at 1% or so.

Those products are complex. I would never buy a product that I cannot easily understand.

I went to several free dinner where the sales rep tries to sell you on some index based annuity and tries to get you to come to their office.

[Kaylee]

Annuities, on average, pay out less than ordinary investment in the market. You pay for stability.

If you want to fund an entire retirement or 50% with an annuity, you may need to save far more than you would ordinarily need to save for retirement.

Different annuities also handle inflation differently, so there may be hidden risk.

That said, annuities can absolutely be a useful part of a retirement plan to add some downside protection and for longevity risk.

A merge of asset classes across emerging markets have historically been recommended for downside protection, better guaranteed returns consistently.

Annuities offers limited growth potential and inefficient, not a ripoff. But you’re better having 50% elsewhere like the option I mentioned above.

An annuity provides stability in terms of number of dollars, but not in terms of value. For example, the $X per year an annuity pays initially may cover all your bills.

After ten or twenty years of inflation, $X per year could cover only 1/4 of your bills, or possibly even less

Any further questions?

[Miles]

We have one but for a smaller amount (about 10%). There are a lot of optional riders and investment vehicles with added advantage over our annuity holdings.

The reason we chose an FIA was to supplement our already existing and well performing multi asset portfolio, more predictable lifetime income and reduced reliance on market performance.

I realize we could have done this many other ways but this is what made sense for us.

I would definitely not be comfortable with 50% in an annuity while there are better money opportunities out there but that is me

At 53, You should consider consulting with a performance based only financial planner or an independent advisor who doesn’t rely on selling financial products.

They can provide unbiased insights tailored to your specific situation and help you navigate retirement planning, including the potential benefits and drawbacks of annuities.

Maybe if you have a family lawyer they might have referrals.

Makes sense?

[Jule]

Annuities are a for me. t’s an insurance product where the company invests the money and gives me a small percentage while making a ton of the rest.

While they offer features like guaranteed income, they often come with high fees and surrender charges.

No thank you, I can invest the money myself and keep total control over it.

[Author]

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