Safety-First Retirement Planning: An Integrated Approach for a Worry-Free Retirement (The Retirement Researcher Guide Series Book 3) by Pfau Wade

Author:Pfau, Wade [Pfau, Wade]
Language: eng
Format: epub
Publisher: Retirement Researcher Media
Published: 2019-09-30T16:00:00+00:00

Chapter 6: Fixed Index Annuities

Fixed Index Annuities Caveat

In this discussion of fixed index annuities, which use to be called equity indexed annuities, I am mostly making an implicit assumption that the annuity is competitively priced. Internal costs reflect was is needed to support the guarantees provided by the insurance company and to keep the company reasonably profitable. But costs are not excessive such that the value to the consumer is eliminated. As well, I assume value is created because the annuity has a clear role to play in the financial plan and is not being sold by an unscrupulous financial advisor only to generate a commission.

It must be noted that not all fixed index annuities are created equal. As will be discussed, they are complex financial instruments, and that complexity can hide a lack of competitiveness in the pricing of individual products. A fixed index annuity that is pitched at a free dinner presentation is more likely not the type of financial product I have in mind, especially if it is misused.

One should tread carefully. Due diligence and a comparison with other annuity options is needed to make sure that the product is fairly priced and will behave in the way that the purchaser understands it to behave. I do not want the “bad” annuities out there to free-ride off of my explanations about the potential positives that can be created by “good” annuities .

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.