Should You Buy an Annuity?
Annuities are a popular retirement planning device. Sales broke a record in 2018, according to data from LIMRA. Yet, they continue to be misunderstood.
There are several types of annuities, with fixed, fixed indexed and variable being some of the most common. Unfortunately, annuities are so complex, that salespeople often have difficulty communicating their values and shortcomings to clients. It is sometimes said, humorously, that the greatest value of an annuity is the steak dinner that it comes with.
Joking aside, the point is that annuities are complex and most of their benefits are intangible, except for the steak. As a client, you will eventually have to decide to become an expert with annuities or to make a leap of faith.
Annuities have value. However, their value must be balanced against the costs and lost
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