Retirement Blunders You Should Avoid #9: Buying Annuities

Do you own or are you considering annuities? We believe deciding to buy annuity could be one of the biggest retirement planning mistakes a retiree can make. In this episode of 13 Retirement Blunders to Avoid, we unveil some of the many downsides to investing in these insurance products.
Why are annuities so appealing? Salespeople often pitch annuities as safe investments, providing guaranteed income for life and stable returns. This is especially appealing when markets are down and investors could have suffered losses. But read an annuity contract’s fine print, and you’ll see annuities are actually complicated insurance products with conditions and riders that are difficult to understand and may have unintended consequences you may not be aware of.
For example, annuities often have a multitude of layered fees and expenses that may be unclear in the contract. Some of these hidden costs include the hefty commissions annuity salespeople make when they sell you an annuity—their incentives are aligned with their bottom line, not your financial well-being. Then, once you’ve committed to an annuity, surrender penalties make it difficult—and often expensive—for you to get out of the contract.
Why else are annuities one of the biggest retirement investment mistakes? If layered fees and hefty commissions aren’t enough to scare you away from buying an annuity, consider how owning an annuity can limit your ability to maintain or grow your assets. Annuities provide no protection against inflation—your annuity’s purchasing power could slowly deteriorate. You might have to pay more in taxes, as many annuities are taxed at the ordinary income rate instead of the capital gains rate, which is often lower.
If you missed Part #8, watch it here. https://youtu.be/jSvSkfv8x9c

For more retirement investment blunders to avoid, please watch the rest of this video series or download a digital copy of the guide here. https://www.fisherinvestments.com/en-us/retirement/guides/retirement-blunders

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Видео Retirement Blunders You Should Avoid #9: Buying Annuities канала Fisher Investments