Index Annuity verses Stock?

Question

Which is Safer and with better return?

Answer 1

Index Annuity is safer with the guarantee. A stock index mutual fund will have better returns.

Answer 2

Safer is never the right word as most do not undertand what safe means. Guaranteed to have more money worth less after taxes and inflation in a bank so not safe. No annuities ever. A gold mine for brokers due to fees. Question still does not matter without specific examples/fee schedules/funds but no annuities.

Answer 3

Variable annuities are very beneficial..... to the selling agent.

I don't have the time to explain but, these high fee instruments which are taxable at your "earnings rate" vs. taxed the usually lower capital gains tax rate are not for 90% of the people that buy them.

As far as the "insurance" part is concerned. It's a cleaver package that you could duplicate at significantly less expense.

Read old articles in FORBES, MONEY MAGAZINE etc. This is not an area most people should be in.

Answer 4

Actually no investing is really 'safe' - recessions, interest rate changes, stock market bursts and bubbles can all be very unpredictable. When your money is tied up in any of this it is never really safe.

If you would like to know more about variable annuities there is an independent website here with an explanation and links to more information.

As with all financial investments, do your own research. Good luck!

Answer 5

Everything I have read about equity indexed annuities is bad. To much of your money is drained away with fees and commissions. It is better to put your money in an IRA, 401K, or other no-load low expense mutual fund. Don't take my word for it, see the links below.

Answer 6

Annuities are a bad idea unless you are retired; the guaranteed "safety" & stable return come at the cost of possible higher returns...


P.S. They are usually a pretty bad idea if you ARE retired, too, but agents love to sell them because they pay high commissions...