Annuities: They Get No RespectPosted June 20th, 2011
We’re all aware that annuities get a bad rap in the media: High fees, high-pressure sales, and unsuitability are the predominating themes.
A recent Securities Litigation & Consulting Group white paper captures the sentiments of the anti-annuity press, commenting that, “[a]nnuities stand out as the investment most likely to be unsuitable since in virtually every instance, the investor would have been better served by mutual fund or a portfolio of individual stocks.”
Annuities are neither inherently “good” nor “bad.” It follows that rational evaluation of annuities can’t be conducted in a bubble—it must focus on their application. Herein lays their value and the coup de grâce the industry and individual producers have been awaiting.
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For previous coverage of annuities in Advisor’s Journal, see How Much to Allocate to Annuities: A Critical Analysis (CC 11-109).
For in-depth analysis of the income taxation of annuities, see Advisor’s Main Library: Section 19.2 Income Taxation of Annuities.