Response: Let's face it... Annuity investing has always had a negative connotation. Ralph from Coral Springs wants to know why. Well Ralph in my opinion that negative cloud exists for a few reasons. Obviously the media portrays this asset class as a whole as a bad choice. Whether or not there are thousands of success stories out there, let's face it, negative news sells. It's much more interesting to read an article about the 82 year old widow who got burned than the 82 year old happy annuity investor. The other issue is that when the media portrays these products, it's done in mass. For example, high fees are normally discussed. Well, I would agree that high fees exist in the variable annuity market place... but that's one of 4 types of annuities that are available to the public. The problem is the public can't differentiate and suddenly ALL annuities have high fees and are bad investment options.
Secondly, I would agree that there are plenty of people who have purchased annuities and have had bad experiences. I would say that's true of any product a consumer could purchase. One investors experience does not make for the demise of an entire asset classification. As I said above, there are plenty of great products out there and plenty of fantastic planners and advisors using them in their practices, you just aren't going to read about them or see them on the news. Thanks so much for your question Ralph .
Carl Barnowski has 25 yrs. of experience as a retirement income expert specializing in principal protected annuities.