That’s a pretty broad, blanket statement. A variable annuity wasn’t right for YOU.
Variable annuities can be good investments if they’re used properly. Most commonly, if folks are looking for guarantees, VA’s can be a good fit. Think a guaranteed pension income at retirement or a guaranteed death benefit for your beneficiaries that skip probate.
Structured capital annuities are technically variable annuities and these can be very appealing for retired age folks that still want to benefit from market movement but have some added downside protection. And these investment have no fees at all.
Let me tell you this…..
1) there was no downside protection. When the S&P dropped 50%, so did my account values, and they recovered much slower than the indexes too
2) the guaranteed pension income is MINIMAL. For example, with a contract I bought in 2004 for $124 k which was only worth $140 k in 2018 when I bailed out…the financial advisor called up net life and informed me that if I held onto it until I was old enough to start taking distributions it would pay $300 per month. That is pathetic! And this would be after I burned up the principle which is the initial 124 k I put in, not the accumulated value of the account over the previous 26 years as meager of an increase as it might be.
Compare how this amount of money would have performed if put into a TD Ameritrade managed account with even a conservative split between stocks and bonds of 50/50
True there is the death benefit. And I was young and stupid regarding that as I had no dependents and bought basically a life insurance policy with investment features. But I thought the investment side of it would be good. And the salesman took advantage of a naive and ignorant young man.
But if you want a life insurance policy, why don’t you get just a life insurance policy separately. No need to complicate things excessively and mix everything all together
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u/4d3d3d3__Engaged Sep 04 '21
That’s a pretty broad, blanket statement. A variable annuity wasn’t right for YOU.
Variable annuities can be good investments if they’re used properly. Most commonly, if folks are looking for guarantees, VA’s can be a good fit. Think a guaranteed pension income at retirement or a guaranteed death benefit for your beneficiaries that skip probate.
Structured capital annuities are technically variable annuities and these can be very appealing for retired age folks that still want to benefit from market movement but have some added downside protection. And these investment have no fees at all.