Response: Thanks so much for writing in Robert.. I truly appreciate you taking the time to ask your question. As you know from reading or listening to anything I have ever published I am not a fan at all of rules of thumb. Everyone that walks through my door and interviews with me has a completely different set up circumstances. As a starting point for discussion, before I meet with a new perspective client I have them complete the Color of Money Survey. This is a simple test to give me an indication of their risk tolerance as well as other things that should be considered in determining asset allocation. As with any asset class, owning too much of one particular type of investment has it's risks. Individuals who were heavily invested in real estate over the last 10 years felt the affects of being heavily weighted there. Having too much of your money invested in annuities may not cause you risk of loss but instead you have liquidity concerns.
The two biggest gripes about annuities are fees and liquidity and if you are too heavily invested in annuities a number of things have gone wrong. Here are a few things to pay attention to:
Carl Barnowski has 25 yrs. of experience as a retirement income expert specializing in principal protected annuities.