The reputation of annuities as “guaranteed” income-generators for retirees has been shredded by countless horror stories of hidden fees, sky-high commissions and dishonest sales practices. We hear one such story from Lucian, a 37-year old investor who fell for a salesperson’s promises of “lifetime payments” and “money-doubling potential” and sank $400,000 of his life savings into a high-cost, low-return equity-indexed annuity. Fee-only fiduciary advisor Eric Lau, who is trying to help Lucian cancel his contract, advises that anyone considering purchasing any annuity should have an attorney review any contract and/or consult with an objective investment professional to discuss other retirement-income options.
Resources
Objective, factual insights on annuities from “Stan the Annuity Man” Haithcock Link
The Society for Annuity Facts & Education, Inc Link
Annuity Consumer Alert from the National Association of Insurance Commissioners Link
NextAvenue articles on annuities (and other retirement income options)
Cautions about Buying Annuities for Retirement (Episode recap) Link
What Could Help Americans Manage Their Retirement Money Link
