OT: Insurance annuites

[Gun guru]

My insurance agent is wanting me to buy insurance annuities....Dont want too.
But my question is, How does an annuity work? From what I know it pays out about 6% over time, not real good. When do you get payments?
Fill me in on this pryamid scam, if that is what it is.

 

[504-2]

He wants to sell it because He will make a ton off it and you won`t. Check at clarkhoward.com he has a lot to say about them and none of it is good.

 

[Anonymous-0]

Even I can be an expert,-- with other people's money

 

[Anonymous-0]

It just all boils down to your goals. If you tend to conservative with your investments the rates are certainly better than CD's right now. The money grows tax free. You are taxed when you take it out. If this was later in life you might be in a lower tax bracket (not always) and pay less taxes verse a CD or savings account where you are taxed annually. Also you are assessed a penalty if you take money out prior to 59 and 1/2 without a drastic reason. Seems to me they make more sense the closer you are to 59 1/2 or make sure you won't need the money. Sure the agent makes a good commission ..... but annuities can be a viable part of a diversified financial plan. Right now not too many things make much sense in financial planning. CD's are low and the stock market might not know which way to go yet.

 

[led]

How much money does he make on the deal? While I have never been to Clark Howard's site, I would go with what he says. Point is never go with finanical planner who makes commission on your purchase. There are a lot of ways to save money for little or no cost. Insurance is for catastrophes.
401k's IRA's or ROTH IRA's are for retirement.
My 2 cents

 

[Gun guru]

Thanks, I just went to the Howard website, pretty much what I knew already but Clark Howard clarified it for me. I need to tell this insurance sales clown to go pound sand.

 

[BC in TN]

Of course this question is being asked AFTER you and your spouse maximize your ROTH IRAs ($4,000.00 each, each year). Isn't it? In my opinion that is absolutely the first investment step.

 

[Mark FL]

Buying a rental property in a city with state government, a university, community college, or other stable industry is a way to earn a good return on your down payment. If you include the property appreciation and the amount of the loan that is paid off each year, the return can be pretty good. It's a long-term investment and you won't get much if any cash out of it for 15 or 30 years, depending on the length of the mortgage.

 

[Anonymous-0]

Generally annuites are not considered a good deal for individual investors. There are many good books on investing and saving for retirement available. Most will say that in most cases an annuity is not a good deal. IRA contributions for those of us over 50 are $6000 now, a "catch up" for older people trying to tax shelter more money for retirement. And if you have a 401-K at work you can max it out to the tune of 20,000 if you are over 50, less if you are not of that age, but still a lot. Always but always take advantage of the 401-K if your employer matches any of your contributions. This is like an immediate return on your money, a raise, or however you want to look at it, they are paying you more than if you didn't take part in the 401-K plan. And if you leave a job do NOT cash in your 401-K, roll it over into an IRA and let it grow until you retire.

 

[John A.]

Gun, Give me a call today before you say something to your Ins agent you may regret! Contrary to some of the others there are many, many times an Annuity is a very appropriate thing. I would like to visit a few minutes. 512-577-3837
Later,
John A.

 

[dave guest]

Ask if you can buy annuity without buying insurance. There's your answer. Usually you buy insurance and small chunk like 5% of this amount is called an investment. So do you want 5%of your insurance as an investment or 100% to be invested and forget the insurance. But perhaps you do need insurance for burial and such, then it might make sense. Lastly, if this peddler cannot explain policy to your complete understanding, then it is not for you.