Ben Stien said invest in annuities,, they are more secure and not as dependant on the market .is his true?
2007-08-29 01:45:38 · 6 answers · asked by flmedic2002 2 in Business & Finance ➔ Investing
I am not an expert on annuities, but I do know a little about them. They are contracts issued by insurance companies. There are different types of annunities. Two I am familiar with are fixed annuities and variable annuities. Fixed annuities pay a particular interest rate for a set period of time. Variable annuities are investment in mutual funds which are dependent on the stock market.
The main advantage of an annuity is that the money earned in an annuity is tax deferred until withdrawn. The disadvantages of annuities are that they have extremely high expenses as opposed to investing the money by other means, for example investing in mutual funds outside of annuities. Because of these high expenses, they really do not make great investments in my opinion. The other big minus is that when you withdraw your money from an annuity it is all taxed at one time. That can place you in a higher tax bracket. Annuity seller like to make the point that you do not have to with draw the money, you can leave it in the annuity. True but misleading. Also you can not withdraw it at any time only when the contract is up.
2007-08-29 02:04:03 · answer #1 · answered by Anonymous · 0⤊ 0⤋
I have several fixed annuities. I'm getting 5% per year on the them. I realize it's not great, but it's guaranteed no matter how bad the market is. If you'd like me to give you my financial advisor name @ #, let me know. I had it for 6 years and made over $50,000 which started at a total of about $250,000.
2007-08-29 02:36:47 · answer #2 · answered by Anonymous · 0⤊ 0⤋
annuities may make sense if you want a secure return in late stage retirement
you basically pay a company a lump sum and they give you a periodic payment. They are betting you will die before you break even. If you live longer than they think, then an annuity may be a better deal, but chances are it won't be.
2007-08-29 02:30:04 · answer #3 · answered by mrrosema 5 · 0⤊ 0⤋
I'm kind of surprised he said that too. I know alot of people who dislike annuities. I have one that my uncle set up for me and it's not that great. They have huge fees attached. Invest in a Roth IRA.
Annuities allow money to grow tax-deferred and then you can get the money paid out to you in installments, like when you retire or when you need it or whatever. It's good if you have like a big chunk of money that you want to put somewhere and have it grow but if it's not so big or even kinda big you're losing out.
They're not as risky as the market.
2007-08-29 01:58:53 · answer #4 · answered by starfishblues 4 · 0⤊ 0⤋
Variable Annuities are often purchased by the wrong people, sold by commission hungry and/or stupid salespeople.
Ben Stein is brilliant. I would look closer at the parameters he gave for buying an annuity. It can't be "any old annuity" for any old purpose.
2007-08-29 06:50:18 · answer #5 · answered by Common Sense 7 · 0⤊ 0⤋
I'm surprised he said that. Most people do not benefit from annuities, because of the fees associated with them.
2007-08-29 01:51:23 · answer #6 · answered by Anonymous · 0⤊ 0⤋