At what age are annuities not the investment of choice>?

Question

At what age are annuituties not the investment of choice?
Larry

Answer 1

Annuities are a legalised robbery. They yield huge profits to city gents who run them, at the expense of fools who invest in them, at any age.

They pay you no more, or even less than first class company shares and when you die, they take the lot. I could not believe it at first.

Answer 2

Look at the annuity's fine print and check the limit when you can withdrawl without penalty. I think that 35 should be the cut off date when one starts an annuity. Many annuities have a 30 year wait time which would make it 65 before you can withdrawl your money. I would compare the annuity to an I-bonds (which are adjusted for inflation, don't have a penalty of withdrawl on the principal, are government insured and can meet or beat the returns on many annuities).

The local con here was some bank representatives were advertising high CD rates and then switching the paperwork with annuities so when people thought they were buying the CDs, they were actually buying annuities. People in their 60s, 70s and 80s were buying these things and would probably die before they could start getting money from their annuities without the stiff withdrawl penalty on their principal.

My thought on annuities is they should never be bought. I-bonds give a better return (one reason is they they are adjusted for inflation) and there are no withdrawl penalties on the principal (so they can be bought and sold at any time and without a waiting period of decades that some annuities have).

Answer 3

Annuities should not be bought in LOW INTEREST environments.
Annuities lock in payment returns based on the interest rate at time of purchase.
If you buy when interest rates are low, you will always have this low return, even when inflation goes up and raises returns elsewhere.

Answer 4

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